Swedish Regulator Calls for Stricter Rules on Unlicensed Gambling

The Swedish Gambling Authority (Spelinspektionen) has released a new report analyzing the accessibility of unlicensed offshore operators in Sweden.

According to the report, 86% of all gambling took place within the licensed system. This is at odds with the fourth-quarter report from Aktiebolaget Trav och Galopp (ATG), which suggested the channelization percentage sat between 69% and 82%. 

Last week, the Swedish government announced reduced state control of the former state-run horse racing monopoly. 

Spelinspektionen’s report outlines that offshore operators remain easily accessible to Swedish consumers. Under the current legal framework, the gambling authority can only take action against unlicensed operators deemed to be explicitly targeting Swedish consumers based on the “direction criterion.” 

As a result, the report estimates that nearly two-thirds of observed unlicensed gambling activity does not meet the threshold for illegality. Under Swedish law, although outside the licensing system, most unregulated activity is not considered unlawful. 

The report urges the government-sanctioned review to shift from a direction-based approach to a participation-based model. The proposed approach would see any gambling activity involving Swedish consumers fall under licensing rules, regardless of marketing approach. 

Skinbetting and Youth Gambling on the Rise

Skin betting accounted for 49% of all traffic to unlicensed sites in 2023, reducing to 41% in 2024. The regulator suggests these sites are particularly popular amongst younger users and often lack stringent age verification protocols. In 2024, six of Sweden’s ten most-visited unlicensed sites were skin betting sites. 

Previously, skin sites have predominantly used streamers and influencers on platforms such as Twitch and Kick. Despite Spelinspektionen issuing several prohibition orders throughout 2024, traffic has remained strong on these platforms. 

Why do Swedish Users Go Offshore?

The report also shows data from a 2024 survey examining the motivation behind using unlicensed sites. It showed:

• 19% of users were enticed by better bonus offers.
• 19% were attracted by higher return-to-player (RTP) rates.
• 22% were simply unaware whether or not the site they were using had a Swedish license.
• 13% wanted to deposit using crypto. 

Spelinspektionen has also outlined that despite attempting to block transactions to unauthorized operators, unlicensed sites use various payment suppliers to bypass restrictions. 

Cryptocurrency, e-Wallets, Neobanks, and SEPA transfers are all cited as methods operators use to avoid detection by the regulator. The regulator also outlined that these sites use advanced tracking and data collection tools to target specific individuals based on their online behaviors. 

Camilla Rosenborg, Director General of Spelinspektionen, commented: “We welcome the ongoing inquiry into expanding the scope of application, which is due to be presented no later than September 17 this year.”

“Despite the challenges of the current legal framework, we believe that our interventions—where they are possible—are important and effective. It is, therefore, essential that we continue our work to combat illegal gambling even as the regulatory review is underway,” she continued.