The Swedish Trade Association for Online Gambling (BOS) has formally submitted its statement to the Ministry of Finance regarding the memorandum titled “A new ban on gambling on credit,” which proposes a ban on the use of credit cards for gambling. BOS has firmly rejected this proposal, citing significant negative consequences for channelization.

Gustaf Hoffstedt, Secretary General of BOS, explained the association’s stance [pdf], emphasizing that such a ban would likely push consumers towards unlicensed and illegal gambling platforms, which currently constitute almost half of the Swedish online casino market. Hoffstedt stated, “In the name of consumer protection, Sweden should not add new restrictions on consumers that still place their bets on the legal gambling market.”

Alternative Proposal Suggested by BOS

If the government decides to proceed with the ban, BOS proposes an alternative approach: instead of placing the obligation on gambling operators, the responsibility should be on credit card issuers. Under this model, the Swedish Financial Supervisory Authority (Finansinspektionen) would supervise credit card issuers to ensure they do not process payments for gambling companies, including those operating illegally or without a license.

BOS argues that this approach would more effectively prevent the use of credit cards for gambling while avoiding further burdens on licensed operators. Hoffstedt pointed out that licensed gambling operators are already heavily restricted and additional limitations could drive more consumers towards the unlicensed market, undermining consumer protection goals.

BOS’s Rationale for Rejection

BOS has consistently supported measures to prevent gambling on credit. However, the association draws a line at banning credit cards, which are a common and regulated form of payment. “At least one credit check is conducted before issuing a credit card,” Hoffstedt noted, “and in most cases, credit is repaid monthly, accruing no interest.”

The association also highlighted that credit card usage for gambling is on the decline, with many consumers shifting to other payment methods like Swish. Those who do use credit cards for gambling are typically older with more organized finances, and the prevalence of problem gambling among them is relatively low.

The biggest challenge, according to BOS, is the prevalence of unlicensed gambling, a view shared by Finance Market Minister Niklas Wykman. Hoffstedt stressed that restrictive measures against licensed operators, such as the proposed credit card ban, combined with inadequate countermeasures against unlicensed operators, have led to a significant outflow from the legal gambling market. “This must end,” he said, emphasizing that enhancing the attractiveness of the licensed market is crucial for effective regulation.

Concerns Over Government’s Approach

BOS expressed concern over the government’s tendency to exempt state-owned or controlled gambling operators from new restrictions, creating an uneven playing field. The association fears that this might undermine competitive neutrality and consumer confidence.

In conclusion, Hoffstedt reiterated BOS’s position that the proposal to ban credit cards for gambling should be rejected. He emphasized that effective regulation should include measures to counteract unlicensed gambling while supporting the legal market.

“Sweden’s largest online casino operator is likely unlicensed,” Hoffstedt noted, underscoring the need for balanced regulation. BOS believes that imposing the ban on credit card issuers rather than gambling operators is a more effective and fair approach to achieving the intended consumer protection goals.

Source: Press release: BOS rejects the proposal A new ban on gambling on credit. BOS. May 23, 2024.

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Sweden’s online gambling association, Branschföreningen för Onlinespel (BOS) is not happy with the government’s plan to increase the gambling tax. According to its general secretary, Gustaf Hoffstedt, this move would be a huge Christmas present to the black market.

For reference, Sweden just proposed to raise its gambling tax from 18% to 22%. The new tax rate would be applied from July 1, 2024, but is already attracting the industry’s hostility. BOS, which has previously critiqued the government of not understanding the market and its vulnerabilities, expressed its disagreement with the measure.

According to BOS, the new measure will undermine the legal market at a very bad time as more and more players are now playing with black market companies.

Spelinspektionen, Sweden’s gambling regulator, previously said that it doesn’t have firm objections to the measure but highlighted possible repercussions. BOS, on the other hand, scrutinized the Ministry of Finance’s decision, saying that it was counterproductive.

The Ministry of Finance Is Giving a “Christmas Gift” to the Black Market

In an official press release, Hoffstedt said that his team rejected the proposal and slammed the Ministry’s decision.

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.

Gustaf Hoffstedt, general secretary, BOS

Hoffstedt added that the industry would only benefit the unlicensed market and further undermine the legal operators. He concluded that the proposal was “the best Christmas present” the Ministry of Finance could have given to the black market.

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.

Gustaf Hoffstedt, general secretary, BOS

Consumers Misunderstand the Market Too

In other news, BOS recently released a new study, highlighting the public’s misconceptions about the industry. Its findings showed that many players believe problem gambling to be a much more prevalent issue than it actually is. In addition, consumers across the country believe that operators keep most of the players’ money, which is also incorrect.

Hoffstedt highlighted the importance of correcting these misconceptions since they are the reason the public has been okay with tougher gambling regulations. This, he says, is hurting the industry and threatening its health.

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Sweden’s iGaming trade association, BOS, has published a new study on public views and misconceptions about the country’s gambling sector. Conducted by the research firm Novus, the survey analyzed Swedes’ attitudes toward and ideas about the industry.

The survey, commissioned by BOS, saw Novus question 1054 participants online, inquiring about their perceptions of Swedish gambling. The firm reported that 57% of these people described themselves as active gamblers, while 41% insisted that they never gamble.

BOS also learned that 1% of respondents gambled daily or almost daily, 15% gambled at least once a week and 15% gambled at least once a month.

When asked about gambling advertising, 72% of the survey participants said that they think gambling advertising has increased since the re-regulation of the Swedish market in 2019. However, some 58% wrongly assume that the gambling industry is the biggest advertiser in the country.

Speaking of advertising, 32% of Swedes do not like seeing gambling sponsorships in professional sports. Furthermore, 73% are opposed to gambling advertisements that feature celebrities.

The Misconceptions Prompt Calls for Tougher Regulation

In addition to the misconceptions the Swedish public has about the industry’s ad share, it also believes that approximately 23% of the entire population of Sweden has gambling problems. In fact, data shows that the people suffering from addiction and those at risk are roughly 4% of all Swedes.

In addition, players assume the return to player rate is much lower than it actually is. While Swedish companies offer RTP of roughly 95%, consumers believe that companies return only 21% of bets.

BOS believes that these misconceptions are very serious and show that the public is not properly informed about how the sector functions. Gustaf Hoffstedt, BOS’ secretary general, said that it is the trade body’s job to inform the public about how things really are.

Hoffstedt also pointed out that these misconceptions are a part of the reason why so many people believe that the Swedish market is in need of tougher regulations. According to him, it is also in the industry’s interest to better inform people about the actual problem gambling rates in the country.

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The Swedish Trade Association for Online Gambling (BOS) has addressed the recently proposed changes to the Money Laundering Act. Put forward by the Ministry of Finance, the memorandum with proposals seeks to increase the penalty fee for certain violations.

The BOS, which represents around 20 licensed gambling companies in Sweden, expressed its delight to have been invited to comment on the matter. The body said that it sees the logic in increasing fines for AML violations to be similar to the fees for violations of the Gambling Act.

Gustaf Hoffstedt, BOS’ secretary general, confirmed that AML violations are among the most serious violations, which is why there is no reason to downgrade them. It concluded that would approve the Ministry’s proposal if the following points are taken into mind and included as necessary additions:

First of all, the BOS said that the Spelinspektionen’s sanction decision must be of high quality. Hoffstedt noted that courts could potentially cause trouble if they opt to change the authority’s decision to a large extent. He proposed initiating supervisory cases as a possible solution.

Secondly, Hoffstedt suggested that the level of sanction fees should be on par with the gambling industry’s “relatively marginal impact” on the financial system’s stability and credibility compared to financial actors.

Thirdly, the BOS proposed to base fines for AML breaches on the gross gaming revenue of gambling companies. Hoffstedt acknowledged that this is already outlined in the Ministry of Finance’s memorandum, which he praised on behalf of the gambling industry.

Hoffstedt: Fines Should Be Based on GGR

Hoffstedt commented on the difference between charging companies based on their total turnover and charging companies based on their GGR:

Typically, the gambling surplus makes up 5-10 percent of the total turnover, while profits to gambling consumers thus account for 90-95 percent. It falls on its own unreasonableness that penalty fees to be paid by the gambling company are based on money that does not belong to the gambling company, but that belongs to the gambling consumers.

Gustaf Hoffstedt, secretary general, BOS

The secretary general concluded that previously, the sanctions system had “lacked any form of proportionality.” However, the changes will set fairer standards that will nevertheless send clear signals to companies that violate the rules.

Speaking of turnover, the Spelinspektionen just published information about the performance of licensed operators in Q2 2023. The authority noted that turnover remains more or less stable, recording only a small decrease.

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