Key Moments:
- Sweden’s gambling tax debate was reignited following the UK government’s recent decision to increase online gambling taxes.
- Online operators, represented by BOS, warned that higher taxes could push more players toward unlicensed platforms.
- ATG argued for differentiated tax rates based on risk and social impact, advocating a lower rate for horse racing and higher for online casinos.
Renewed Tensions Over Swedish Gambling Tax Policy
The recent move by the UK government to nearly double taxes on online gambling has reverberated across Europe, sparking fresh debate in Sweden regarding how gambling should be taxed. The country’s online gambling firms now find themselves at odds with horse racing operator ATG, with both sides asserting that their proposals serve the interests of consumer protection. Meanwhile, each accuses the other of manipulating the market for its own benefit.
Online Operators Voice Concerns Over Potential Consumer Exodus
On December 15, the trade association BOS submitted a letter to the Swedish government. This letter, endorsed by 13 executives from various gambling companies as well as BOS secretary general Gustaf Hoffstedt, urged government ministers to reject ATG’s proposal. The letter asserted that raising taxes on online gambling would only drive more players away from licensed operators, leading them into the unregulated sector.
“The level of the gambling tax affects the proportion of consumers who choose to gamble on the legal licensed gambling market, and that too many consumers are already opting out of the safety of the licensed market with its extensive consumer protection,” BOS said in its press release accompanying the letter.
Hoffstedt highlighted that different gambling products experience different levels of channelization. He stated, “Horse betting has a channelisation rate of between 98-99 percent. Online casino, according to the most optimistic estimates, has a channelisation rate of between 72-82 percent.”
Addressing ATG’s proposal, Hoffstedt maintained, “The higher the tax, the greater the risk that the consumer will choose unlicensed gambling, where neither gambling tax nor consumer protection exists,” and added, “To then lower the gambling tax for horse betting, which already has a very strong channelisation, and raise it for online casino, which has a very weak channelisation, would be completely incomprehensible. At least for those who prioritise consumer protection.”
BOS has repeatedly warned that implementing stricter rules or higher costs for licensed online operators could replicate outcomes seen in other markets, where a substantial share of users shifted to offshore, unregulated gambling options.
ATG Stresses the Need to Recognize Risk and Social Contribution
ATG countered the call for uniform gambling tax rates, asserting that taking into account the differences between gambling products better serves the public interest. In a blog post dated December 2, ATG chief executive Hasse Lord Skarplöth commended the UK’s approach for distinguishing between different product types in its tax structure.
“The tax on online casinos and online betting will be increased from 21 to 40 percent next year, explicitly justified by ‘higher harm.’ At the same time, the taxation of horse betting was left unchanged at an effective level of around 25 percent,” he explained.
“Online casinos don’t” finance anything beyond gambling itself, while horse racing supports “breeders, trainers, tracks, jobs, events and a living cultural heritage,” he added.
Skarplöth drew parallels to Sweden’s situation: “Either we continue to pretend that all forms of gambling are equal, or we tax according to actual risk and benefit,” he wrote. He argued online casino games carry “statistically associated with greater harmful effects”, in contrast to horse racing, which he characterized as having “a significantly lower risk profile”.
He further warned that recent tax changes had already had a negative impact on the horse industry. “For ATG, this means a reduced contribution to trotting and galloping sports by SEK 200 million (€18.4 million) annually,” he wrote. Skarplöth advocated for restoring a lower horse racing tax rate and proposed elevating online casino tax rates to 26 percent as “reasonable and responsible as financial compensation”.
Long-Standing Division in Swedish Gambling Sector
This dispute is the latest in a string of conflicts within Sweden’s gambling industry. BOS and ATG have frequently locked horns over measures such as bonus bans and tougher advertising restrictions, with BOS claiming that these measures, while framed as consumer protection, often end up benefiting state-aligned operators at the detriment of private businesses.
In a recent conversation with SiGMA News, Hoffstedt commented that “the elephant in the room for consumer protection is that consumers are to such a large extent absent from the legally licensed part of the gambling market,” cautioning that any policy making licensed gambling less appealing “is to give up the fight of defending the licensed gambling market and its consumer protection”.
Summary Table: Key Arguments from Stakeholders
| Stakeholder | Position | Key Argument |
|---|---|---|
| BOS (Online Operators) | Opposes Higher Taxes | Warns higher taxes on online gambling would increase play with unlicensed operators, undermining consumer protection |
| ATG | Favors Differentiated Tax | Advocates lower taxes for horse racing due to social benefits, and higher for online casinos due to greater risk |
- Author
Daniel Williams
