Sweden’s national gambling authority, Spelinspektionen, has responded to its government’s proposed 4 percent tax raise applied to Gross Gaming Revenue (GGR).

The regulator has called for careful monitoring of market developments with the initial tax rate, set in 2019, being re-regulated with the sole intention of boosting government revenues without regard for the industry’s sustainability. 

This hike in particular is believed to be suitable to enhance government funding and is set to be presented to parliament in the spring of 2024.

Spelinspektionen’s stance

The regulatory body has not acknowledged any major objections to the tax increase, however, it has highlighted potential repercussions, expressing concerns about an impact on the channelisation rate due to increased gambling taxes and other factors. 

The channelisation rate away from illicit grey market operators to tax-paying operators within Sweden is of particular interest to the government and could pose significant issues for the legislature.

Spelinspektionen also noted a recent downturn in total market turnover over the past two quarters, impacting licence holders and potentially signalling changes in the gaming market that could lead to a reduced tax base.

Uncertainties continue to persist regarding whether the downturn is temporary or a more permanent shift.

BOS weighs in

The Swedish Trade Association, BOS, has brought forth much stronger criticisms of the government’s new tax measure citing a lack of understanding of the market’s vulnerability when the proposal was first introduced in September. 

Gustaf Hoffstedt, the Association’s secretary general described the intentions as highly disappointing.

He also emphasised the point of channelisation, predicting an even further decrease subsequent to this measure’s potential implementation.

The channelisation stands at an estimated 77 percent with some verticals dropping as low as 72 percent, a significant issue when considering the Swedish government’s target of 90 percent channelisation.

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