Sweden’s state-owned gambling monopoly faces an unprecedented challenge this week that could open up the Nordic country’s lucrative betting industry to international competition.
Swedish online gambling company Betsson will open a high street betting shop in Stockholm on Friday, deliberately breaching laws which state all bookmakers must be run by Svenska Spel, the state monopoly.
Betsson has not only decided to break the law, but has also publicly challenged the government to prosecute it if it dares. “We are calling their bluff,” said Pontus Lindwall, chief executive.
The Swedish government is under growing pressure from the European Commission to open the gambling market to competition in accordance with EU rules on the free movement of services.
The Commission asked Sweden last year to amend its gambling laws or face possible referral to the European Court of Justice. Sweden joined the EU in 1995.
Mr Lindwall said Brussels’ stance meant the government would not dare to prosecute Betsson for opening its betting shop as it would not want to be seen to be blatantly picking a fight with the EU.
Online gambling companies such as Betsson are able to provide internet-based betting in Sweden via offshore registered companies. Betsson is registered in Malta and EU-authorised.
But they are unable to build a high street presence even though Svenska Spel has been permitted by the government to develop online gambling operations.
Sweden’s centre-right government, which was elected in 2006 on a business friendly, free-market platform, has stated it wants to privatise parts of the betting monopoly.
But at the same time it has shunned EU pressure to amend the laws, saying some state control is needed to ensure the gambling industry is properly regulated to prevent addiction, illegal operators and associated fraud.
Mr Lindwall accused the government of deliberately slowing down the process. “The government just wants to retain a source of revenue. That is not legal grounds to keep the monopoly,” he said.
Svenska Spel reported a profit of SEK 5.2bn (USD 880m) in 2007, of which SEK 3.6bn was paid to the state treasury and the remainder to areas such as the Swedish Sports Federation and youth programmes.
Christofer Fjellner, a representative in the European Parliament for the governing Moderate party, agreed the finance ministry was putting revenues ahead of its commitment to free markets.
“They seem to hope that by doing minor changes they might be able to convince the EU that they can keep the monopoly. They have 5.2bn reasons to keep the market closed,” he observed.
The finance ministry declined to comment, saying regulation of the gambling industry was up to the Gaming Board.
Sweden is not the only EU member under pressure from the European Commission to open its gambling industry.
France and Greece have been warned not to bar foreign competitors or face lawsuits. Italy was forced to open its market by the EU in March 2007. Denmark, Austria, Hungary and Portugal also operate monopolies.