Gustaf Hoffstedt, the secretary general of Sweden’s Online Gambling Trade Association (BOS), has issued a strong rebuke against ATG CEO Hasse Lord Skarplöth’s recent proposal to raise taxes on online gambling operators. Skarplöth had suggested that Sweden should emulate the United Kingdom by increasing taxes for online gambling, while exempting the horse racing industry from such hikes. The UK government recently announced that its remote general betting duty would rise from 15% to 25% by April 2027, and the remote gaming duty would increase from 21% to 40% by April 2026. These changes have sparked criticism, with the Betting and Gaming Council (BGC) warning they could undermine sectors like iGaming and sports betting.
In Sweden, Hoffstedt argued that implementing similar tax increases could inflict significant damage on the regulated gambling sector, likening it to “self-harm.” He emphasized that Sweden’s gambling market is already contending with one of the most substantial black markets in Europe. According to him, increasing taxes would not alleviate risks but would rather drive players away to offshore sites, thereby undermining consumer protection and shrinking the regulated gambling market. Hoffstedt referenced ATG’s channelization estimates, which indicate a range of 74% to 85% for the third quarter, falling short of the government’s 90% channelization target.
Hoffstedt further questioned the rationale behind targeting online gambling for tax hikes. The BOS recently released data showing that since the initiation of Sweden’s legal online gambling market in January 2019, gambling-related harm has not increased. In fact, their research suggests a decrease in problem gambling, with only 1.3% of the population having a Problem Gambling Severity Index (PGSI) score of three or higher in the fourth quarter of 2024, compared to 2.2% at the market’s inception.
According to Hoffstedt, while all forms of gambling can pose risks to individuals with existing gambling issues, these activities are generally harmless for those without such risks. Interestingly, the lottery sector exhibits the highest proportion of problem gamblers, suggesting that tax hikes should not selectively target online gambling.
Hoffstedt proposed that rather than raising taxes, effective regulation should focus on channelization to enhance player safety. He argued that the policy should aim to close the gap between licensed and unlicensed operators. By doing so, Sweden could ensure better consumer protection and maintain a robust regulated market. Furthermore, if tax increases were considered necessary, Hoffstedt recommended focusing on horse race betting, which already enjoys high channelization rates between 98% and 99%, rather than online casinos.
To provide context, Sweden’s decision to launch a regulated online gambling market in 2019 was part of a broader European trend towards legalizing and tightly regulating online gambling. This move aimed to boost consumer protection, reduce illegal gambling, and generate tax revenue. However, these objectives often encounter challenges, as seen in other countries grappling with similar issues, including the balance between regulation and maintaining a competitive market.
Skarplöth’s proposal has brought to light the delicate act of balancing tax policy with market dynamics. While higher taxes could theoretically increase government revenue, they also risk driving consumers to unregulated markets, which offer no consumer protections—a concern echoed by many industry stakeholders. This tension is not unique to Sweden; other nations, including Germany and the Netherlands, are also navigating these challenges as they adapt their regulatory frameworks to the evolving online gambling landscape.
A significant risk in following Skarplöth’s proposal is that it could exacerbate the issue it intends to solve by reducing the competitive edge of licensed operators. This might inadvertently enhance the attractiveness of unlicensed operators, who are not subject to the same tax burdens, thereby increasing the potential for gambling-related harm without effective oversight.
The debate in Sweden mirrors broader conversations in countries worldwide, where governments strive to maximize tax revenues from gambling while ensuring player safety and sustainable industry growth. Policymakers must weigh the benefits of increased taxation against the potential downsides, such as market shrinkage and reduced consumer protections.
In summary, the response from the BOS underscores the complexity of gambling regulation in today’s interconnected world. While the intention to generate more revenue for state coffers is understandable, Hoffstedt’s arguments highlight the potential pitfalls of a simple tax hike solution. Instead, a nuanced approach that considers the entire ecosystem—ranging from consumer protection to market dynamics—might offer a more viable path forward for Sweden’s gambling sector. As discussions continue, the Swedish government will need to carefully weigh these considerations to avoid unintended consequences and ensure a balanced, effective regulatory environment.
Garry Sputnim is a seasoned journalist and storyteller with over a decade of experience in the trenches of global news. With a keen eye for uncovering stories that resonate, Alex has reported from over 30 countries, bringing light to untold narratives and the human faces behind the headlines. Specializing in investigative journalism, Garry has a knack for technology and social justice issues, weaving compelling narratives that bridge tech and humanity. Outside the newsroom, Garry is an avid rock climber and podcast host, exploring stories of resilience and innovation.
