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Swedish operators threaten to sue government over Svenska Spel

Swedish gaming operators are preparing for a legal battle with the authorities over the future status of state-owned operator Svenska Spel in a liberalised Swedish gambling market.

Sweden has submitted the draft of its new gambling legislation to the European Commission but according to Gustaf Hoffstedt, secretary general of Swedish industry association Branschföreningen för Onlinespel (BOS), the draft is lacking a number of details, most importantly concerning the future of Svenska Spel.

“The notification does not give any clear directives. That absence seems to have given Svenska Spel the impression that it can do anything it likes,” says Hoffstedt.

The issue surrounds Svenska Spel’s apparent decision to house two separate companies (one for monopoly operations such as the lottery and bricks and mortar casino and the other for the online gambling company) in a holding company, after the re-regulated market opens on January 1st, 2019.

Under such a scenario, Svenska Spel would not be allowed to share customer data between the two companies, however, Hoffstedt suggests this is unworkable in practice.

“The whole idea of a holding company is that they share values,” he says.

While some have suggested that the online gaming arm of Svenska Spel should be privatised, others realise that this is an emotive issue for socialist politicians. While the socialist parties are in government, there is no appetite for privatisation and little pressure from outside government. However, this could change after the Swedish election in September this year.

“It is fine that the state owns the operations as long as the split is total,” Hoffstedt asserts.

If it is not, Hoffstedt expects that the BoS or another grouping of operators will be forced to argue the competition issues in court.

“If operators are entering a domestic licensing system, they should be guaranteed a fair competition,” he says.

Sweden's proposal for a re-regulated market included a recommendation that Svenska Spel retain its monopoly on land-based gaming and lottery, with a separate division to operate in the competitive online market. The proposal stated that the state monopoly could be split into two separate divisions that share administrative and other common functions, “provided sufficient measures are taken with regard to the separation of Svenska Spel's two sections”.

The BoS argues that this hybrid setup could allow the public and private arms of Svenska Spel to share customer databases, thereby distorting competition.

However, this is dismissed by Svenska Spel's management, which argues that private operators already have a strong position in the online gaming market, having built up a database of players prior to liberalisation, while Svenska Spel has been prohibited from participating.

Svenska Spel’s period of transition was complicated further last week, when chief executive officer Lennart Käll announced his decision to step down and allow someone else to guide the company into a liberalised market.


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