Online Gambling is Big in Sweden

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Rent Spel, which translates as Fair Play, is a trade association of Swedish parties interested in the gaming industry. It was founded by former Unibet chief executive Petter Nylander. Professor Henrik Jordahl of Rent Spel has authored a report on online gambling in Sweden based on research carried out by the Stockholm based Research Institute of Industrial Economics. The salient finding of the report is that 26% of all gambling in Sweden takes place over the Internet. Online gambling is also one of the biggest employers in Sweden. Professor Jordahl therefore urges the Swedish government to get more proactive on online gambling.

The report shows the dominance of the online gambling industry in Sweden by comparing it with other industries. Swedish online gambling companies, excluding the state owned Svenska Spel, have a market valuation greater than SEK19 billion. Almost 2,000 skilled people are employed in these companies and another 2,500 people are employed by the government in gaming operations. The report states that the online gambling industry employs as many Swedes as national car manufacturer Saab, and is more successful. In the report Jordahl points out that the video gaming entertainment industry is often held up as a shining example of Swedish technological competence and success. Actually the online gambling sector is worth more, performs better with greater numbers of highly educated employees, and is more profitable.

Jordahl states that Sweden is missing out tremendously because the government is not proactive on liberalizing the online gaming sector. Because Sweden does not issue licenses to private online gambling companies, companies like Betsson and Net Entertainment operate in overseas jurisdictions like Malta. Therefore those jurisdictions are attracting increasing numbers of highly skilled Swedish specialists. Similarly advertising opportunities are being lost by Sweden's present restrictive position on advertising in the online gambling industry.

The Research Institute of Industrial Economics report also refers to investigations by the domestic newspaper Dagbladet. These investigations revealed that the Swedish government, operating through the National Pension Fund, has share holdings in major online gambling companies such as Unibet, Betsson, Net Entertainment and Ladbrokes. It was reported that these holdings could be worth as much as SEK972 million, and hence a significant percentage of pensions assets are invested in online gambling. Ironically, these companies are not being granted licenses to operate in Sweden.

The report concludes by recommending that the government overhaul the online gambling market in Sweden to bring it into line with current European regulatory trends and to maintain its leading position in the new European market environment that is evolving. The government can no longer remain passive in this matter.

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