Sweden Gambling Channelisation Improves but Illegal Market Persists

The Swedish horseracing betting operator AB Trav och Galopp has indicated that gradual progress is being made in the country’s ongoing effort to curb unlicensed gambling activity. In its latest market analysis, the operator reported a modest decline in illegal betting alongside incremental improvements in channelisation, a key metric used to measure the proportion of gambling conducted through licensed platforms.

While the findings point to a positive trend, the report also underlines that structural challenges remain. The persistence of unlicensed operators, combined with regulatory gaps and technological overlaps, continues to limit the effectiveness of Sweden’s gambling framework.

Channelisation improves but remains below target

According to ATG’s estimates, Sweden’s channelisation rate reached between 72 and 84 per cent during the fourth quarter of 2025. This marks a slight improvement compared to the 69 to 82 per cent recorded during the same period in 2024. Despite this upward movement, the figures remain below the Swedish government’s long-standing target, which aims for a significantly higher proportion of gambling activity to occur within the licensed system.

Channelisation is widely regarded as a critical benchmark for regulatory success. A higher rate suggests that consumers are engaging with operators that comply with national laws, consumer protection standards and responsible gambling requirements. Conversely, lower rates indicate a leakage of activity into unregulated environments where oversight is limited.

Size of unlicensed market remains significant

Despite the reported gains, ATG cautioned that the unlicensed gambling sector in Sweden continues to represent a substantial economic force. The operator estimates that net revenue generated by unlicensed entities falls between SEK 3.6 billion and SEK 7.3 billion, equivalent to approximately €330 million to €660 million.

This wide range reflects the inherent difficulty in measuring illegal or offshore gambling activity, which often operates beyond the reach of domestic reporting frameworks. Nevertheless, even conservative estimates suggest that a notable share of consumer spending remains outside the regulated ecosystem.

ATG calls for stronger regulatory measures

Commenting on the findings, Tobias Melin, Head of Analysis at ATG, emphasised that while progress is evident, current measures are insufficient to achieve the government’s objectives.

“Channelisation is moving in the right direction, but there is still a long way to go to reach the state’s goal,” Melin stated. He added: “At the same time, we see how unlicensed sites use the same platforms, payment solutions and sometimes even exist despite decisions from authorities. This shows that the regulations need to be tightened to really shut out the unlicensed operators.”

His remarks highlight a key concern within the Swedish gambling sector. The overlap in infrastructure between licensed and unlicensed operators complicates enforcement efforts and raises questions about the role of third-party service providers in facilitating access to illegal platforms.

Shared infrastructure blurs the lines

One of the report’s more notable findings is the extent to which unlicensed operators rely on the same technological and financial infrastructure as their licensed counterparts. ATG observed that 14 of the 20 most-visited unlicensed gaming websites utilised platform providers that also serve regulated operators.

In addition, eight of these sites offered direct transaction capabilities with Swedish banks, enabling users to deposit and withdraw funds with relative ease. This level of accessibility may contribute to the continued appeal of unlicensed platforms, particularly among consumers seeking fewer restrictions or different product offerings.

The report further noted that five of the identified websites had been included on the blacklist maintained by Spelinspektionen, Sweden’s national gambling regulator. Despite this designation, the continued availability of these platforms suggests that enforcement mechanisms may require further strengthening.

Diverging channelisation trends across segments

Data published by the Swedish government in 2025 presents a mixed picture of channelisation across different segments of the gambling market. Sports betting appears to perform relatively well, with channelisation rates estimated between 92 and 96 per cent. This indicates that the vast majority of sports betting activity takes place within the regulated sector.

However, the online casino segment shows a lower level of compliance, with channelisation rates ranging from 72 to 82 per cent. This disparity suggests that online casino products may be more susceptible to competition from unlicensed operators, potentially due to differences in game variety, bonus structures or regulatory constraints.

The Swedish Online Gaming Association has argued that stricter regulations within the licensed market may inadvertently drive consumers toward offshore alternatives. According to the association, limitations on bonuses and marketing could reduce the competitiveness of licensed operators, thereby encouraging players to seek alternatives that offer fewer restrictions.

Legislative reform aims to close enforcement gaps

In response to ongoing concerns, Sweden is preparing to introduce new gambling legislation designed to strengthen regulatory oversight. A central component of this reform is the removal of what has been described as the “directorial criterion.”

Under the existing framework, authorities have been required to demonstrate that an online gambling operator specifically targeted Swedish consumers in order to classify its activities as illegal. This requirement has been widely criticised for limiting the ability of regulators to take action against offshore operators that are technically accessible within Sweden but not explicitly marketed to its residents.

The proposed changes would allow Spelinspektionen to act against any gambling service that is accessible to Swedish users, regardless of its intended audience. This shift is expected to significantly enhance enforcement capabilities and reduce the operational space available to unlicensed providers.

Industry outlook and regulatory balance

The evolving regulatory landscape in Sweden reflects a broader challenge faced by many jurisdictions. Policymakers must strike a balance between maintaining strict consumer protections and ensuring that the licensed market remains attractive to users.

If regulations are perceived as overly restrictive, there is a risk that consumers will migrate to unlicensed platforms that operate outside the scope of national laws. Conversely, insufficient regulation can expose consumers to harm and undermine the integrity of the market.

ATG’s findings suggest that while Sweden is making measurable progress, achieving the desired level of channelisation will require coordinated efforts across regulators, operators and service providers.

Conclusion

The latest analysis from AB Trav och Galopp offers a cautiously optimistic view of Sweden’s gambling market. Incremental improvements in channelisation indicate that regulatory measures are having an effect, yet the continued strength of the unlicensed sector underscores the complexity of the issue.

The presence of shared infrastructure between licensed and unlicensed operators, combined with gaps in enforcement, highlights the need for a more comprehensive regulatory approach. Planned legislative reforms, particularly the removal of the directorial criterion, may provide authorities with the tools needed to address these challenges more effectively.

Looking ahead, the success of Sweden’s strategy will depend on its ability to adapt to a rapidly changing digital environment while maintaining a fair and competitive market. A balanced framework that protects consumers without discouraging participation in the licensed sector will be essential in reducing the influence of unlicensed gambling and achieving long-term stability.

FAQs

What is channelisation in the gambling industry?
Channelisation refers to the proportion of gambling activity that takes place through licensed and regulated operators within a jurisdiction.

Why is channelisation important in Sweden?
It helps ensure consumer protection, regulatory oversight and tax collection by directing users toward licensed platforms.

What did ATG report about Sweden’s channelisation rate?
ATG estimated that the rate reached between 72 and 84 per cent in Q4 2025, showing a slight improvement compared to 2024.

How large is Sweden’s unlicensed gambling market?
ATG estimates that unlicensed operators generate between SEK 3.6 billion and SEK 7.3 billion in net revenue.

Who regulates gambling in Sweden?
The national regulator is Spelinspektionen.

What issue did ATG identify with unlicensed operators?
Many unlicensed sites use the same platforms and payment solutions as licensed operators, making enforcement more difficult.

Why is online casino channelisation lower than sports betting?
Online casino products may face stronger competition from unlicensed sites due to differences in bonuses and regulatory restrictions.

What is the directorial criterion in Swedish law?
It is a rule that required authorities to prove that a gambling service specifically targeted Swedish users before taking action.

How will new legislation change enforcement?
The new rules will allow regulators to act against any gambling service accessible in Sweden, regardless of targeting.

What is the main challenge for Sweden’s gambling market?
Balancing strict regulation with market competitiveness while reducing the influence of unlicensed operators.