Swedish Trade Group Writes To Government Over Tax Hike

December 11, 2023
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Sweden’s largest gambling trade group has made official its opposition to a planned tax increase, labelling it contradictory, as it publishes documents submitted to the government.
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Sweden’s largest gambling trade group has made official its opposition to a planned tax increase, labelling it contradictory, as it publishes documents submitted to the government.

In September, Sweden announced plans to lift its taxes for online gambling to 22 percent of gross gaming revenue (GGR), up from the current 18 percent.

In a written submission to an ongoing consultation on the planned 2024 budget, online gambling trade group BOS has said the plan “is in conflict with all of the government’s stated goals for the gambling market”.

The uplift, BOS claims, will lead to a greater proportion of players gambling on the black market.

The trade group says this will weaken an already languishing channelisation rate, particularly for online casino.

Estimates commissioned by BOS and separate analysis by formerly state-owned operator ATG puts the online casino channelisation rate at anywhere between 60 and 72 percent.

In its submission, BOS points to pre-reform statements by the then government that targeted a 90 percent channelisation rate.

The government has since softened its line on a specific target rate for channelisation, a policy BOS said it should reaffirm and include as a specific goal in legislation.

The true picture of Sweden’s offshore gambling market is the central issue affecting the tax rate. In announcing the planned hike, the government said it was confident that the market “has stabilised and channelisation has increased significantly” since it began licensing online operators in 2019.

The online operators represented by BOS, however, along with ATG, protest that the rate of players seeking gambling outside the licensed system is catastrophically low.

“The government can hardly time its proposal to raise the gambling tax to a worse time. We are in a situation where fewer and fewer players choose to play on the safe licensed market, and more and more on the unregulated, unlicensed gambling market,” said BOS chief executive Gustaf Hoffstedt.

“That the government proposes to raise the tax for licensed gambling is the best Christmas present you can think of to the unregulated and unlicensed gambling market,” he said.

The Swedish Gambling Authority has acknowledged the issue to some extent, making the provision of services to unlicensed operators that target Sweden an explicit violation of its recent supplier licensing drive, and a baked-in objective of the overall project.

Sweden’s online gambling tax rate is, however, now noticeably lower than its European counterparts. Remote gambling taxes in the UK were increased to 21 percent of gross gambling yield several years ago and the country’s government is currently considering whether it should increase betting taxes to match.

Denmark increased its tax rate to 28 percent of GGR in 2021, while rates in Germany are effectively much higher at a rate of 5.3 percent of turnover, for example.
 

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