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The Alarming State of Swedish Gambling

The Alarming State of Swedish Gambling
by
March 15, 2024
in iGaming News, Laws
118

The Swedish operator group ATG disclosed concerning findings regarding the channelisation rate in the country’s gambling market. This article delves into the details of the report, highlighting its implications and calling for urgent actions to address the identified challenges.

The Channelisation Rate Crisis

The report unveiled by ATG underscores a significant disparity between the government’s target channelisation rate and the actual figures observed in the market. According to the findings, the rate of player migration towards the legal gambling market during Q4 2023 fell notably short of the government’s target, ranging between 69% and 82%. This discrepancy raises alarms, particularly as the government had set a lofty target of 90% channelisation.

Persistent Decline in Channelisation

What is particularly concerning is the persistent decline in channelisation witnessed over consecutive quarters. The report highlights that this decline has continued for the second consecutive quarter, with the channelisation rate dipping from the previous range of 70% to 82% observed in Q3. Such a trend indicates systemic challenges that demand immediate attention and proactive measures to reverse.

ATG’s Call to Action

Hans Lord Skarplöth, the CEO of ATG, expressed deep concern over these findings, emphasizing the urgent need for intervention. He stressed that unlicensed gambling poses a grave threat to both the integrity of the Swedish gambling market and the well-being of vulnerable individuals with gambling problems. Skarplöth called for concerted efforts to curb the influence of unlicensed operators and safeguard the interests of consumers.

Unlicensed Sites Escaping Regulation

Another troubling revelation from the report is the apparent inefficacy of regulatory measures in addressing unlicensed gambling sites. Shockingly, none of the 20 unlicensed sites identified in the report were listed on the Swedish regulator’s prohibition list. This loophole in the regulatory framework raises questions about the adequacy of current enforcement mechanisms and necessitates urgent reforms.

Platform Provider Complicity

Compounding the issue is the involvement of platform providers associated with both licensed and unlicensed operators. The report highlights that 19 out of the 20 unlicensed sites with the highest traffic during the quarter shared platform providers with licensed operators. This raises concerns about the complicity of certain service providers in facilitating illicit gambling activities, underscoring the need for stricter oversight and accountability measures.

Rapid Growth of Unlicensed Traffic

The report also sheds light on the alarming surge in traffic directed towards unlicensed gambling sites in recent years. Since 2019, there has been a tenfold increase in traffic from Sweden to unlicensed operators, indicating a significant failure in channelisation efforts. Moreover, seven out of the 20 unlicensed sites with the highest traffic offered direct deposits and withdrawals from Swedish bank accounts via payment technology company Krofort, highlighting the ease of access and financial transactions associated with illicit gambling.

Banking Sector’s Role

In light of these findings, ATG’s CEO called for greater cooperation from the banking sector in combating unlicensed gambling. Skarplöth urged banks to take proactive measures to block transactions to unlicensed operators, emphasizing their role in upholding regulatory standards and preventing financial flows to illicit activities. He criticized the apparent disparity in the treatment of licensed and unlicensed operators, calling for a level playing field in regulatory enforcement.

Conclusion

The findings presented in ATG’s report paint a sobering picture of the state of the Swedish gambling market. With the channelisation rate falling significantly short of targets and unlicensed operators evading regulatory scrutiny, urgent action is needed to address systemic weaknesses and protect consumers. Stakeholders across the industry, including regulators, operators, and financial institutions, must collaborate effectively to stem the tide of illicit gambling and uphold the integrity of the market.

FAQ:

What is the channelisation rate in the Swedish gambling market?
The channelisation rate refers to the percentage of players who participate in the legal, regulated gambling market as opposed to unlicensed or illicit operators.

Why is the channelisation rate important?
A high channelisation rate indicates effective regulation and oversight, ensuring consumer protection, tax revenue generation, and the integrity of the gambling industry.

What are the implications of a low channelisation rate?
A low channelisation rate signifies challenges in regulatory enforcement, including the proliferation of unlicensed operators, potential risks to consumers, and loss of revenue for the government and licensed operators.

How do unlicensed gambling sites evade regulation?
Unlicensed gambling sites often exploit loopholes in regulatory frameworks, operate from jurisdictions with lax oversight, or use sophisticated technologies to conceal their activities and identities.

What role do platform providers play in the gambling industry?
Platform providers offer the infrastructure and technology solutions for online gambling operations, including website development, payment processing, and customer management systems.

Why is the involvement of platform providers with unlicensed operators concerning?
Platform providers associated with unlicensed operators may enable illicit activities by providing essential services, such as hosting websites and processing transactions, thereby undermining regulatory efforts to combat illegal gambling.

How can the banking sector contribute to combating unlicensed gambling?
Banks can implement measures to block financial transactions to unlicensed gambling operators, such as monitoring and blocking payments to known illicit sites and enhancing due diligence procedures for high-risk transactions.

What challenges does the Swedish gambling market face in terms of consumer protection?
Consumer protection in the Swedish gambling market is compromised by the presence of unlicensed operators, inadequate regulatory oversight, and gaps in enforcement mechanisms, posing risks to vulnerable individuals with gambling problems.

What reforms are needed to address the shortcomings in the Swedish gambling market?
Reforms should focus on strengthening regulatory enforcement, enhancing collaboration between stakeholders, improving transparency and accountability, and implementing measures to promote responsible gambling and consumer protection.

How can consumers identify licensed gambling operators in Sweden?
Consumers can verify the legitimacy of gambling operators by checking the Swedish Gambling Authority’s list of licensed operators, ensuring that they comply with regulatory requirements and adhere to responsible gambling practices.

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