CEOs Object to Swedish Social Security Minister’s Gambling Regulations

On January 1st, 2019, a set of new gambling regulations were introduced in Sweden. The reform, directed by Sweden’s Minister for Public Administration, Ardalan Shekarabi, was strongly supported by the parliament. These regulations implied that the state should regain control of a now largely unregulated gambling market, with many companies operating without a license. 

The gambling market would therefore be regulated through a process called channeling, which essentially means controlling the percentage of users that choose to play through licensed Swedish companies. Some companies welcomed the change, while others were completely opposed. 

A year later, not much has changed
 

Now, a year later, more and more licensed companies that initially embraced Shekarabi’s regulation package are complaining that they are now in a worse financial situation than other companies that chose to continue operating illegally. 

On April 23, 2020, Sherakabi issued a new set of emergency restrictions, which he deemed essential to combat the major risks in the gambling sector right now. Twelve gambling CEOs have taken action to object to the minister’s low channelization on the gambling market, warning that such measures would have the undesirable effect of increased consumer escape from the licensing system.

Gustaf Hoffstedt, secretary general for the Swedish Trade Association for Online Gambling, has said:

The licensing system is fragile and can’t endure further attacks from the Minister. He must do the opposite and safeguard the licensing system in the name of consumer protection.

Companies urge a change of strategy and better communication on the part of the Minister, but only time will tell whether Shekarabi becomes aware of the negative effects of his regulation measures and the degree to which some of them can be rolled back.