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Supervision of Sweden’s gambling market is inadequate

The Swedish Gambling Authority carries out too few inspections of the operators in the Swedish gambling market. Furthermore, the choice of who should be subject to supervision is not based on a well-founded risk analysis and the Authority does not follow up on the rectification of the deficiencies.

A hand is holding two playing cards, the ace of spades and the king of spades. There are several poker chips around.

In 2019, a new Gambling Act was introduced that included a licensing system, enabling commercial companies to legally target online gambling to the Swedish market. An important aim was for the gambling to take place under public control. The Swedish Gambling Authority assumed responsibility for supervision of the industry.

The Swedish National Audit Office’s audit shows that Swedish Gambling Authority’s supervision is not sufficiently effective. The main problem is that the Authority carries out very few inspections. This applies to both the licensed and unlicensed markets.

“Supervision of gambling that is associated with high risk is particularly important. This includes commercial online gambling and betting, which should be controlled much more. It is also important to exclude illegal gambling from the market,” says Deputy Auditor General Claudia Gardberg Morner.

The shortcomings are partly due to the priorities that the Swedish Gambling Authority has chosen to make. The Authority emphasises that new government assignments and other activities crowd out possibilities to conduct supervision to the desired extent.

“In this situation, it is particularly important that the supervisory resources are used where they bring the most benefit. To achieve this, the Authority needs to base its supervisory planning on systematic risk analysis. This is not currently the case,” says Hedvig Tängdén, project leader for the audit.

Another material shortcoming is the Swedish Gambling Authority’s lack of follow-up of the results of its supervisory decisions; only one follow-up supervision has been carried out in the last five years. Therefore, the Authority does not know whether the identified deficiencies have been rectified and thus lacks knowledge of whether the resources are being used in a cost-effective way.

To uphold the legitimacy of the system, it is important to have an effective system of sanctions with quick and tangible responses to infringements of the regulations. However, supervision is hampered by the lack of clarity in the Gambling Act, which has opened up the possibility for a ‘grey’ gambling market in Sweden.

“The Government should clarify in which cases online gambling requires a license. This would facilitate supervisory activities,” says Ms Gardberg Morner.

Recommendations in brief

It is recommended that the Government

  • ensure that the Swedish Gambling Authority has the conditions to carry out effective supervision to a sufficient extent;
  • ensure that reliable and accurate information on the scope and results of the supervision are produced and inform the Riksdag accordingly;
  • investigate the question of the scope of the Gambling Act in order to clarify in what cases online gambling is covered by the Gambling Act.

The recommendations to the Swedish Gambling Authority include the following:

  • Develop the arrangements for planning, managing and following up supervisory activities.
  • Work actively to increase the scope and effectiveness of the Authority’s inspections of both the licensed and unlicensed gambling markets.