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Sweden’s government proposes increased gambling tax

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Sweden’s government has today Wednesday proposed an increase in the gambling tax, from 18 percent of GGR to 22 percent of GGR. The reason, according to the government, is that the gambling market should have stabilized since the reregulation in 2019 and that channelization is said to be high.

BOS Secretary General Gustaf Hoffstedt comments:

The announcement from the government is deeply disappointing, above all because it shows that the government does not understand or has taken to heart what kind of market it is set to govern. Even less has the government understood the vulnerable position that market is in.

We were recently able to show that channelization in the Swedish gambling market is 77 percent. Some gambling verticals, including online casino, are as low as 72 percent. The trend is also declining, in other words the channeling decreases over time.

We are already far from the state’s goal of at least 90 percent channelization, and if this tax increase is approved by the Riksdag, we will soon be down to the channelization we had before Sweden reregulated its gambling market in 2019. A reregulation that took place because Sweden had such a low channelization at the time.

Sweden’s government must perform much better than this. There is still time to withdraw the proposal, concludes Gustaf Hoffstedt.

The government’s proposal can be found in Swedish on pages 289-290 here: https://www.regeringen.se/contentassets/e1afccd2ec7e42f6af3b651091df139c/forslag-till-statens-budget-for-2024-finansplan-och-skattefragor-kapitel-1-12- appendices-1-9.pdf

Below a Google translation of the same text:

Increased gaming tax

The government’s assessment: The excise tax on gambling should be increased from 18 to 22 percent of the balance for each tax period.

The upcoming proposal should enter into force on 1 July 2024.

The reasons for the government’s assessment: One of the purposes of today’s gambling regulation is to protect the surplus from gambling activities for the general public by contributing to the financing of government activities. With the exception of gambling that is reserved for public benefit purposes, licensed gambling is taxed according to the Act (2018:1139) on tax on gambling. According to this law, excise duty is levied at 18 percent of the balance for each tax period. The balance is made up of the difference between the total stakes and the total payouts. A taxation period consists of one calendar month.

An increase in the tax on gambling should be well balanced to avoid a major negative impact on the proportion of gambling that takes place at the companies that have a license for gambling in Sweden. From the bill A reregulated gambling market it appears that a tax of just over 20 percent can be considered compatible with an aim to achieve a channelization rate of at least 90 percent (prop. 2017/18:220 p. 258). In that bill, however, a lower tax level was proposed for precautionary reasons. The current tax rate of 18 percent has applied since the Swedish gambling market was reregulated in 2019. The gambling market has since stabilized and channelization has increased significantly. In addition, measures have been taken to exclude unlicensed gambling from the Swedish market, which came into effect 1 July 2023 (prop. 2022/23:33). The reasons for caution when setting the tax level should therefore not be as strong now as during the re-regulation. An increase from 18 to 22 percent is judged to be at a suitable level to strengthen the financing of government activities, without it leading to too great an impact on the companies and the size of the tax base. The excise tax on gambling should therefore be increased from 18 to 22 percent.

The upcoming proposal should enter into force on 1 July 2024. The government intends to return to the Riksdag in the spring of 2024 with a proposal according to the above. The upcoming proposal is estimated to increase tax revenue by SEK 0.27 billion in 2024 (half-year effect) and thereafter by SEK 0.54 billion per year.

Compliance Updates

The Danish Gambling Authority Has Had 79 Illegal Gambling Sites Blocked

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On 22 August 2024, the court in Frederiksberg ruled in favour of the Danish Gambling Authority to have 79 websites blocked that offered illegal gambling to Danes.
Among the blocked websites are sites that are particularly aimed at children and young people.

Every year, the Danish Gambling Authority blocks websites that offer gambling products and services to Danes without a licence. The blocks are an important part of the Danish Gambling Authority’s work to protect the players and at the same time ensure a fair and legal gambling market in Denmark.

In 2024, the Danish Gambling Authority has blocked the access to a total of 162 illegal websites that offer gambling to Danes. This is the highest number of blocks in a year so far. Since 2012, a total of 438 websites have been blocked so that they cannot be accessed via a Danish telecommunications provider.

The decision to block websites is made by the courts, and the Danish Gambling Authority has been in court twice this year to have illegal gambling sites blocked. In February, 83 pages were blocked.

The Danish Gambling Authority’s option to block access to the illegal sites is done via a so-called DNS block. This means that the connection between the player and the gambling provider’s website is blocked by the player’s telecommunications provider. If the user tries to access a blocked website, they are greeted by a page stating that the site is illegal and blocked by the Danish Gambling Authority.

“We know that some players will try to bypass the DNS blocks. Therefore, it is very important to us that the information you come across is clear and makes the players aware that they are trying to access a site without a licence. These sites do not have the same level of consumer protection and it can be very risky for a player to use them,” Anders Dorph, Director of the Danish Gambling Authority, said.

Sites without a licence from the Danish Gambling Authority do not necessarily meet the same requirements as sites with a licence, and therefore players do not get the same consumer protection and security on the illegal sites.

It is, for example, impossible to play on a site with a licence if you are under 18 or if you are registered with ROFUS (Register of Voluntarily Excluded Players).

The blocked sites offer different types of gambling such as online casino, online betting and skin betting.

In the latest block, three of the 79 sites contained a new type of skin betting. Here, players can, among other things, use “Robux” as stakes as well as win Robux which is the virtual currency in the computer game Roblox.

“We pay particular attention to this new type of site. Roblox is a game that is very popular among children and young people under the age of 18. Our children should not be introduced to gambling when they play video games, so I am very pleased that we have blocked access to these sites,” said Anders Dorph.

When the Danish Gambling Authority assesses that a website offers gambling illegally without a licence, the Danish Gambling Authority asks the gambling provider to stop the illegal offering. If they do not stop the offer, the telecommunications providers are asked to block their customers’ access to the websites. If this does not happen, the Danish Gambling Authority will proceed with the case and ask the district court to order the Danish telecommunications providers to block the websites.

In the past, only telecommunications providers with membership of the Teleindustrien have been involved in the Danish Gambling Authority’s blocking processes.

In this round of blocking, however, three telecommunications providers who are not members of the Teleindustrien have also blocked access to the illegal sites.

All three telecommunications providers have blocked access to websites with illegal gambling offerings that were part of this blocking process as well as websites covered by previous rulings.

“We are very happy that three more telecommunications providers have closed access. This ensures that even more players are protected from being able to access the illegal sites,” said Anders Dorph.

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Compliance Updates

Google Updates Gambling Ad Policy for Germany

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Google has announced significant changes to its Gambling and games policy specifically for the German market. The update, set to take effect on September 25, 2024, introduces stricter requirements for gambling operators and brokers seeking to advertise on Google’s platforms in Germany. This policy revision aims to align Google’s advertising practices with German regulations and ensure compliance with local gambling laws.

According to the announcement, which came exactly one month before the implementation date, only gambling operators and brokers licensed by the Gemeinsame Glücksspielbehörde der Länder (GGL) will be eligible to apply for advertising certification for gambling products outlined in Google’s Gambling and games policy. The GGL, which translates to the Joint Gambling Authority of the German Federal States, is the central regulatory body overseeing gambling activities in Germany.

This policy update represents a significant shift in Google’s approach to gambling advertisements in the German market. Previously, a broader range of gambling-related services could potentially advertise on Google’s platforms. However, with the new policy, applications from advertisers of online gambling services who do not meet the GGL licensing criteria will no longer be accepted. This change extends to services offering gambling aggregation, such as websites that link to multiple offers from different operators on their landing pages.

The implications of this policy update are far-reaching for the online gambling industry in Germany. Existing certifications for services that do not meet the new criteria will be revoked on the policy’s effective date, September 25, 2024. This revocation will prevent these services from running gambling ads targeted at the German market through Google’s advertising platforms.

To understand the full impact of this policy change, it’s essential to delve into the technical aspects of Google’s advertising ecosystem. Google Ads, the primary platform for advertisers to reach Google’s vast user base, operates on a complex system of policies and certifications. The Gambling and games policy is a crucial component of this system, designed to ensure that gambling-related advertisements comply with local laws and regulations.

The certification process for gambling advertisers on Google involves several steps. Advertisers must first ensure they meet the eligibility requirements for their specific country or region. With the new policy update, this eligibility in Germany will be directly tied to GGL licensing. Once eligibility is confirmed, advertisers must complete an application process, which includes providing detailed information about their gambling operations and licenses.

Google’s policy update reflects the evolving regulatory landscape of online gambling in Germany. The country has implemented stricter controls on online gambling in recent years, culminating in the establishment of the GGL as a centralised regulatory authority. This move towards centralised regulation aims to create a more consistent and controlled environment for online gambling across all German states.

The policy change also highlights the challenges faced by multinational technology companies in navigating diverse regulatory environments across different countries. Google, as a global platform, must balance its business interests with compliance with local laws and regulations. This often results in country-specific policy updates, as seen in this case for Germany.

For gambling operators and advertisers, the policy update necessitates a reevaluation of their digital marketing strategies in the German market. Those without GGL licensing will need to explore alternative advertising channels or pursue licensing if they wish to continue advertising on Google’s platforms. This could potentially lead to a shift in the competitive landscape of online gambling advertising in Germany.

It’s worth noting that Google’s policy update aligns with broader trends in digital advertising regulation, particularly in sensitive sectors like gambling. Regulatory bodies and technology platforms are increasingly focused on ensuring that online advertisements for gambling services are responsible and comply with local laws.

The timing of this announcement, coming exactly 30 days before the implementation date, provides a window for affected advertisers to adjust their strategies. However, given the complexity of obtaining gambling licenses, this timeline may pose challenges for operators not already in the process of securing GGL licensing.

Google’s policy update also raises questions about the future of gambling advertising on other digital platforms. As major tech companies often follow similar regulatory trends, it’s possible that other advertising platforms may implement comparable policies in the German market or other jurisdictions with strict gambling regulations.

From a technical standpoint, the implementation of this policy will likely involve updates to Google’s ad review systems.

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Compliance Updates

Swedish Regulator Gets Increased Powers for Online Gambling Intervention

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The Swedish government has confirmed that its gambling regulator, Spelinspektionen, has been granted further control over licensees.

As a result of the intervention, the Spelinspektionen will be enabled to directly step in when it feels necessary with cases of excessive online gambling.

The government in the region said: “This decision represents a tightening of efforts against gambling problems and strengthens consumer protection.”

It enhances the control and governance of the regulator as it can now set the license holders’ action plans aimed at combating excessive gambling.

Starting from 1 October, Spelinspektionen will have the authority to modify the action plans of individual licensees to meet duty of care requirements.

The Gambling Act requires Swedish online gambling operators to have an action plan that outlines their duty of care procedures, protocols and routines.

However, Spelinspektionen informed the government that its oversight revealed significant differences in how licensees’ action plans protect customers from excessive gambling.

In response, Spelinspektionen requested the power to set specific requirements for these action plans. It emphasised that “all license holders should clearly describe in their action plans their guidelines for gambling responsibility and how these are to be implemented.”

Minister of Financial Markets Niklas Wykman, supporting the expanded powers for Spelinspektionen, added: “There must be order in the gaming market. The new requirement should lead to more detailed action plans, making it clear how gambling companies take responsibility for counteracting gambling-related risks.

“This strengthens Spelinspektionen’s ability to prevent people from being affected by the negative aspects of gambling.”

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