Former Denmark regulator and Nordic gambling expert Morten Ronde updates iGaming Business on the developing regulatory framework in Sweden
The EC standstill period set aside for review of the main draft law ended on 20 March. What are the next steps and how should operators and affiliates be preparing?
We are all waiting for the Swedish State Counsel to deliver a legal assessment of the draft law. They need to do that before the government can submit the draft in parliament. There was a deadline for the government to submit proposals on 20 March.
If the political parties agree, they could submit the legislation later, but they would have to make this a priority measure. So at the moment, stakeholders are anxiously waiting to see if this is going to happen or not during this parliamentary session.
What was outlined by the CEO of the gambling authority recently is that the law would be tabled in parliament in March, the gambling authority would publish a number of secondary regulations that same month, the law adopted by parliament in May and the first licensing window opened in July.
We are hoping to know by early April if this will happen.
How will affiliates be regulated under the new Swedish framework?
Not all the regulation has been revealed yet. From what we can see so far, it’s the same system as in the UK and Denmark, where the operators are liable for all marketing, including that undertaken by affiliates on their behalf.
The question is if there will be independent liability for the affiliate. We don’t know this yet. The draft law submitted to the EC before Christmas introduced a restriction on retention bonuses, but that doesn’t affect affiliates too much as they would market the acquisition bonus.
So for now, it looks as if affiliates will go relatively unscathed, but we don’t know yet if there will be more restrictions in the forthcoming secondary legislation.
Denmark became the poster boy of dot.country regulation compared with the regimes that preceded it, with a viable tax rate, poker pools left open to international liquidity and open dialogue between authorities and stakeholders. Has Sweden learnt the lessons from this?
Absolutely. The draft law and the regulations are in part identical to the Danish system, and a bit of a mix between those in place in Denmark and the UK, so a lot of lessons have been learnt.
The proposal as it stands right now looks pretty good for the industry, but restrictions on retention bonuses and possibly more to come could change the picture.
The worry is that the government has not wanted to consult with the industry, so there’s no possible way to speak about the issues or address industry’s concerns. While there has been a public consultation process around the draft law and report, no other dialogue has been possible as the gambling authority has refused to meet with operators.
There has been no way of relaying our concerns apart from writing to it. This may change when the law is before parliament, but the authority has taken a very cautious approach so far.
Some operators have criticised monopoly Svenska Spel potentially being able to cross-sell between their non-competitive and competitive databases from 2019. Will that really be much of an advantage given the strength of international brands there and is it that different from those operators leveraging their dot.com databases?
You have seen from Denmark that it was an issue and that it remains so. Danske Spil was cross-selling casino games to winning players, creating an unfair advantage over operators without those products.
Maybe it won’t be the same in Sweden, as the Kindreds and the Betssons have a stronger foothold, but it’s still a very concerning issue which hasn’t, from what we’ve seen yet, been properly addressed in the law.
So this is something we are hoping the government has addressed in the new draft to be presented in parliament. It currently says Svenska Spel has to split its businesses but it’s not clear enough. The industry is pushing the government to clarify this.
Morten Ronde is CEO of the Danish Online Gambling Association and partner of Nordic Gambling. Morten has 18 years of experience in the gambling industry. He will be speaking on the panel, The Swedish opportunity and the lessons from Denmark, on 25 April @ 10;00 at the Nordic Affiliate Conference.