A report by a commission set up by the Swedish Government to look into the future of gambling legislation in the country, has recommended that the market should be opened up to independent operators.

The country currently has a lottery-based market, which is restricted to government outlets and some horse racing and independent non-profit-making organisations, but commercial operation by the business community is banned. Profits go into public projects and charities.

With about 2,000 foreign websites now offering online gambling to Swedes, the protective intentions of the Swedish lottery regulations are effectively by-passed.

At the same time, the country’s admission to the European Union in 1995 meant that Sweden could be subject to some decisions of the European Court of Justice, which has already ruled against some government activities in gambling in other countries.

The inquiry was set the task of proposing new lottery regulations which would open the market to new operators, identifying those types of gambling most prone to addiction so that these areas could be more tightly controlled by government departments.

It was also part of the inquiry’s task to ensure that fresh regulations did not lead to increased gambling. It was an objective to set up a system of Swedish Government permits for online gambling.

Sweden has two government-controlled gambling companies, Svenska Spel and ATG, supervised by the Swedish Gaming Board (Lotteriinspektionen).

The inquiry decided that current Swedish gaming regulations were within EC law and could form a model for future legislation. It also decided that the most problematic form of gambling from an addiction viewpoint, is automatic gaming machines, casino games and interactive internet gambling, including internet poker, bingo and scratch cards. Internet gambling brought with it a problem of control, the inquiry decided.

Regulation

It pinpointed three alternatives for future regulations. The inquiry decided that as the Swedish regulations remained in accordance with EC law, there is no necessity to open the market to new operators, but leaving the current laws in place would ‘require a restrictive gaming policy with the overreaching objective of counteracting gambling addiction and criminality.’

Doing nothing then was the first alternative. Second was the impact of technology and the internet, involving casinos, poker, bingo and betting with odds, giving a problem of control.

If new operators of internet-based gambling were to be permitted, it was certain that they would require access to poker and bingo at least. But as these formed areas of the most threat of ‘problem gambling,’ the inquiry found no reason to propose that internet gambling be opened for licensing.

The third alternative to confronting uncontrolled gambling on foreign websites would be to open up one type of gambling to new operators. The inquiry felt that betting on sports competitions and other events such as the Eurovision Song Contest, are areas of internet-based gambling that could be opened.

However, this might be too limited in scope to be attractive to new operators. It found that the form of gambling that could be considered for licensing is odds betting and pools, with the exception of horse racing betting and that this could be provided through betting agents and through the internet.

Given the three choices, the inquiry concluded that the only practical way forward was to use one or other of two alternatives, doing nothing, or opening up to one form of gambling. It decided to recommend the tightening up of the current regulations, and to begin issuing permits for odds and pools betting - excluding horse racing.

Permits would give the right to offer gambling via the internet or through betting agencies. A new Lotteries Act is proposed to include new operators.

Licensees would benefit from protection within a national system but regulations on internet gambling should be tightened up. Foreign companies would not be banned from applying for licences.

Lotteries Act update

The inquiry therefore recommended a new Lotteries Act based on the current one and would be updated and reworked by a series of ordinances in the future. It would also include a new permit system for new operators.

Both Svenska Spel and ATG would have their operations regulated by the Act and the role of issuing permits would move from the government to the Swedish Gaming Board (Lotteriinspektionen) whose name would be changed to the Swedish Gaming Market Supervisory Authority (Spelmarknadsinspektionen).

New general marketing rules would be introduced, designed not to target children or young people under 25 and would not be allowed to market interactive games and gambling on automatic gaming machines at all. An age limit of 18 is proposed for participation in lotteries.

A system for vetting lottery sales agents would be introduced and they should not be allocated to agents whose business already holds permits to serve alcohol. Agents would have to undertake measures to prevent gaming dependency.

Strong penalties would be put into effect for companies offending the new regulations and to assist in this, new technical requirements for equipment would be issued. A new definition of illegal automatic gaming machines would be introduced.

The Lottery Tax Act will apply to the activities of new permit holders and the current exemption from paying the tax, which applies to government-owned gambling companies is to be abolished. Other points from the recommendations include the banning of physical poker tournaments.

The conclusions are that Sweden’s Government is being recommended to relax its monopoly on gambling in the country by issuing permits for the commercial operation within its jurisdiction.

It is proposed that internet gambling companies should be licensed, effectively controlling them by a ‘stamp of approval’ peace of mind for players and also restricting marketing to those companies licensed by the authorities.

It is also permitting the type of play to go through the odds and pool betting style of games. It would not appear, at first reading of the regulations, to ban the use of VLTs provided that they are not operated in locations also serving alcohol.