Sweden plans to increase its gambling tax to 22 percent of revenue from Summer 2024, arguing the market is stable and highly channelled and can bear the brunt of extra costs.
On Wednesday (September 20), Sweden unveiled its budget proposal for 2024 and amid a raft of tax cuts for a variety of sectors included a planned tax hike for the gambling sector.
Ministers want to raise taxes on gross gaming revenue (GGR) from the current 18 percent to 22 percent from July 2024, arguing that the market has settled since the country abandoned its monopoly model for a licensing system in 2019.
In explanatory notes on the planned increase, the government pointed to research conducted before the market opened, which indicated a tax rate just above 20 percent would be reasonable.
Instead, said the government, officials at the time opted for an 18 percent rate “for precautionary reasons”.
“The gambling market has since stabilised and channelisation has increased significantly. In addition, measures have been taken to exclude unlicensed gambling from the Swedish market,” said the government.
That means the government can raise the tax to 22 percent without pushing players to the black market, it claims.
The Swedish Gambling Authority estimates that the number of people gambling within the licensed market is at or around 90 percent, which meets the government’s re-regulation target, but that figure is highly disputed by the industry.
A survey commissioned by online trade group BOS estimated that online poker and casino games have a channelisation rate of just 77 percent.
BOS reacted angrily to the news, with the group’s chief executive, Gustaf Hoffstedt, calling on the Swedish government to “perform much better than this”.
“The announcement from the government is deeply disappointing, above all because it shows that the government does not understand or hasn’t taken to heart what kind of market it is set to govern. Even less has the government understood the vulnerable position that market is in,” he said.
“There is still time to withdraw the proposal,” urged Hoffstedt.
The government estimates that the tax increase would net it an additional SEK540m (€43m) a year.