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Economics of Gambling in Sweden

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In Sweden the betting and gaming industries are well developed. A greater proportion of Swedes than any other nation participate in gambling in its various forms. Typically 85% of the Swedish population participated in the betting and gaming industries in any given year, making Sweden an important gambling market, even though it ranks as only the 12th largest economy in Europe. (Source: GB GC Report)

Lotteri Inspektionen, Sweden’s National Gaming Board, regulates the gambling industry. In Sweden. Lotteries and horseracing are regulated by the Lotteries Act 1994 and the Casino Act 1999.

None of the companies operating in the gambling market has to pay VAT in Sweden. There is also no special fee for obtaining a license, however, companies must pay an administrative license consideration fee, which differs greatly depending on the type of license and the amount of devices. The Gaming Board or Regional Province Authorities might ask for an additional contribution in order to make a regular check for compliance with the regulations, which are not expected to change in the next 5 years.

Swedes spent SEK 19.9 billion (€2.1 billion) on gambling services in 2002, and SEK 20.9 billion (€2.2 billion), in 2003. Gambling revenues play an important role in the sports sector in Sweden. However, gambling contributes only very marginally to the cultural sphere. Profits generated by Svenska Spel, for example, are distributed by the state to the Swedish National Board of Youth Affairs, Swedish Sports Confederation (which includes approximately 20,000 sport clubs), Handslaget (Sports Billion) and other support to sport. The Swedish Sports Confederation alone had 1.4 billion SEK (€147million) funding derived from the gambling industry in 2004. Part of this money, however, was obtained by organising small scale nonfor-profit lotteries organised by the Swedish Sports Confederation.

In 2004 there were 611 people employed in Svenska Spel, 750 people in Casino Cosmopol and 240 in ATG. There are no figures as to employment in other sectors of the gambling industry.

One threat to the gambling industry in Sweden is that some public officials and elements of the media continue to show some concern over the issue of gaming addiction. As it is VLTs that are the games most frequently cited as encouraging excessive gaming habits, particularly among young people, Svenska Spel has intensified its education and information initiatives in the area of gaming responsibly. In a report on gaming addiction, the Swedish National Institute of Public Health (Folkhälsoinstitutet) proposes various measures to control gaming addiction, which are being taken into consideration by the Riksdag in developing a Bill regarding the future of the gaming market.

Since June 2001 Svenska Spel has been able to offer lottery games, bingo and casino gaming via the Internet. During September 2003 it added bingo and digital scatchcards, the latter utilising established brands such as Triss, Tia, SkrapBingo and SkrapPyramid. Sales for the nine games offered by Svenska Spel´s website doubled during 2002, reaching SEK 100 million (€10.6 million). According to Svenska Spel’s analysis, however, in total Swedes bet almost SEK 3 billion on the Internet with only a third of this amount being spent with legal Swedish gaming companies.

During 2003 betting via mobile phones was piloted on some specific sports events. During June 2003 Svenska Spel´s direct channel sales rose by 64% as it reached SEK 495 million.

Mobile phones and the Internet are now responsible for generating almost 4.2% of the company’s revenue derived from its traditional lottery products.

By 2002 approximately 250,000 players held an Internet gaming account with Svenska Spel, with 130,000 of these being active. Twelve months later there were more than 250,000 active players with a personal Svenska Spel Internet gaming account regularly accessing products through a personal password. This surpassed the company’s target of 230,000 active players by the close of 2003. Total visitors to the site tripled during 2003 to reach 1.5 million a month. By the end of 2002 nine of Svenska Spel’s most popular games were available on svenskaspel.se: the number games keno and Lotto and the pools games Stryktipset, Italienska Stryktipset and Måltipset. Joker, a supplementary game, is available on the coupons just as it is via the company’s agent network. Oddset games Lången, Mixen and Bomben are also available and the new game Mixen is only available on svenskaspel.se.

During October 2003 Svenska Spel launched its instant scratch card on its website, with their addition immediately boosting the website’s turnover significantly. The games included Triss, Tia, Skrap-Bingo and SkrapPyramid. In addition three new single-player and multi-player bingo games, including classic bingo and pattern bingo, were also launched. As with Svenska Spel’s Internet casino, Boss Media has developed the games using Flash technology, which does not require the player to download software. During April 2004 it was announced that Trisslotten, Sweden’s most popular gambling product, is to be available both on Svenska Spel’s Internet site and via mobile telephone.

During November 2003 Sperospel.se, the first private organisation to be granted a gaming license by the Swedish National Gaming Board (Lotteriinspektionen), launched its Internet site. The site that includes three instant games was developed by EGET. These are Casinolotto, a new adaptation of keno with a jackpot of up to SEK 3 million (€318,400), Femman, Sweden’s cheapest scratch card, and Sperolotten, which also has a jackpot of SEK 3 million. Sperospel.se is operated by Spero Online, a company owned by IOGT-NTO lotterierna, A-lotterierna and PAF. Spero Online AB works in close relationship to Spero Spel, which sells traditional scratch cards via authorised retailers.

GAMING SECTOR ANALYSIS

Lotteries

On the National level there are 30 charitable lotteries, which include all non-for-profit organisations that deal with general public interest, and one national lottery enterprise – AB Svenska Spel. Svenska Spel has a network of over 6,000 agents selling their products, with about 3,500 gaming agents with on-line terminals and 3,000 lottery agents. About 3,200 of the retailers are full-service retailers.

Svenska Spel has exclusive rights to offer VLTs on the Swedish market. The VLTs are placed in restaraunts and bingo halls. The restaraunts amounts to 2,145 and the bingo halls amounts to 91. As a result, there are many SMEs employed in the distributional network of Svenska Spel.

All of Svenska Spel’s surplus proceeds are allocated to the national treasury, except those generated by operation of VLTs, which are placed in a fund to which charitable organisations involved in youth activities may apply and those generated as a result of greyhound race betting, which are allocated to the Swedish Greyhound Racing Federation. (Svenska Spel terminated offering betting on greyhound races in 2004 because the organization determined it was no longer economically viable.) The amount allocated to the non-governmental charitable organisations during 2003 was SEK 202.8 million (€21.5 million), with a further SEK 606.7 million (€64.4 million) being allocated to the Swedish Sports Confederation. Finally SEK 200 million (€21.2 million) was allocated to a sports fund called ‘the Sports Billion’. The total amount passed to beneficiaries though government by Svenska Spel was 506,744,500 Euros in 2004. (Source: GBGC Report)

In addition to Svenska Spel there are also four major other organisations that offer lottery games: Folkspel, IOGT-NTO, A-lotterierna and the Rikslotterier (National Lottery).

There are also a number of regional and local lotteries run for the benefit of voluntary associations and clubs. In 2002 these lotteries generated sales of SEK 9m (€955,000).

Looking ahead Svenska Spel expects that its sales will continue to increase but that the rate of increase will slow down somewhat. The exact level of increase will be dependent upon the new gambling legislation and its impact, and foreign competitors.

Casino Gaming

In 1999, the Swedish Government authorised a maximum of six (initially four with two to be introduced later) international-style casinos. The first of these became operational two years later. The four new casinos would primarily be developed in the nation’s largest cities, Stockholm, Gothenburg, Malmö and Sundsvall. Three of these cities are the largest in Sweden, but Sundsvall, 400 kilometres north of Stockholm, is much smaller.

The new properties are operated by AB Casino Cosmopol, subsidiary of the National Lottery, AB Svenska Spel. Holland Casino’s has been involved in a five-year contract to assist Svenska Spel with the commissioning of properties and the training of staff during the startup period.

Besides casinos, table games can be found in restaurants and hotels in Sweden (Restaurangkasinos.) By 2005, there were 814 tables authorized for operation in restaurants/hotels in Sweden. These gaming tables are owned by approximately 100 companies and located in about 200 Swedish restaurants.

Restaurangkasinos pay special gambling taxes specified by law.

Machine Gambling Outside Casinos

The only company that is authorised to run gaming machines is AB Swenska Spel. Much of the improved performance of Svenska Spel was driven by the growth of the two VLT games Jack Vegas and Miss Vegas. Between the two games there are 7,132 devices in operation across 2,100 venues which generated a total GGR of SEK 1.952 billion (€207.1 million), up some 15% on the 2002 levels. These machines have grown in popularity since the banning of all AWPs and Wheel of Fortune machines that came into effect on 1 February 2002.

Careful selection criteria and strategic placement of the machines in restaurants, pubs and bingo halls have also contributed strongly to their success.

The Government limit the number of gaming machines to 7,500 video lottery terminals in 2,000 age-controlled environments, such as pubs and restaurants with an alcohol license under the Jack Vegas brand, and in 100 bingo halls under the Miss Vegas brand.

In addition there are five enterprises that are allowed to run very low stake/prize machines in amusements arcades and parks.

Betting

There are only two companies who organise betting in Sweden. They are AB Svenska Spel, which has a monopoly in sports events and dog racing, and AB Travoch Galopp (ATG), who runs horse betting. The development of the sports betting programme that included the expansion of the games available was one of the reasons for the recent increase in sales of the Svenska Spel. The company now offers more than 15 different sports across its Oddset games.

The Swedish horserace betting handle was SEK 10.68 billion (€1.134 billion) in 2001 with off course shops accounting for approximately 78%, 18% being placed on course and 4% via the Internet. During 2002 there were a total of 10,444 races staged over a total of 1,014 race days. Turnover in 2002 was SEK 10.18 billion (€1.080 billion). In 2003 ATG’s handle recovered to SEK 10.53 billion (€1.118 billion). (Source: GBGC Report) Prior to 1953 greyhound racing in Sweden was confined to amateur races with small cash prizes. The horserace betting in Sweden is taxed at 36% of GGR per year. The horseracing pay out rates vary depending on the type of the race and are between 65% and 85%.

Altogether there are thirteen greyhound tracks operating in Sweden, ten of which have continued to operate without betting. The three that have elected to have betting have been rebuilt and modernised.

Bingo

Bingo is a very popular form of gambling in Sweden. There are approximately 100 bingo halls across the country and there are 575 licenses to run bingo by not-for-profit organisations, which use the gambling proceeds for public interests. Several different companies could operate in the same bingo hall.

Tipsbingo that was organised by Svenska Spel was radically upgraded in May 2002, with its name changed to Söndagsbingo. Bonusbingo, a new supplementary game, was introduced to attract new players and viewers to the show. However, sales fell in both 2002 and 2003 reaching SEK 108 million.

Folkspel, the organisation that offers BingoLotto, is an organisation run by and for more than 70 voluntary associations and clubs that is part of Arvidsson and Yrlid. Recent years have seen Folkspel’s sales decreasing. BingoLotto is an interactive TV game broadcast at prime time on Saturdays when it generally secures between 40% and 45% of viewers.

During 2000, over 2.2 million BingoLotto tickets were sold weekly via sales outlets in Sweden, of these between 40,000 and 50,000 were sold by youth sports clubs, with 40% being retained by the clubs. Forty per cent of the ticket sales will benefit good causes in Sweden and 48% of the turnover is prize money. However, since this time BingoLotto’s ticket sales have fallen substantially. During 2002 they fell 5% to SEK 2.787 billion (€295.8 million), and then by a further 21.8% to SEK 2.180 billion (€231.4 million) during the following year.

(Source: GBGC Report)

Media Gambling Services

During December 2000 the Swedish Football Association and Svenska Spel launched their joint venture TV production company, Spelkanalen (The Gaming Channel). The channel commenced broadcasting the following month with more than ten hours per day of dedicated programming distributed to more than 1,000 agents where customers are able to watch.

Content includes sports news reports, dog races, draws and commercials. Folkspel, the organisation that offers BingoLotto, runs an interactive TV game broadcast at prime time on Saturdays when it generally secures between 40% and 45% of viewers. More details on BingoLotto is in the Bingo section of this report.

Paragraph 21 in the Lottery Act (1994:1000) says that it is possible to organise a lottery for periodical publishing companies, providing the participants in the lottery do not have to buy a newspaper and with a maximum winnings/stakes of 1/60. Unfortunately, however, there are no statistics available for such forms of gambling.

Sales Promotional Gambling

Sales promotional gambling is not permitted in Sweden unless there is an element of skill in the game. In that case, sales promotional gambling services are allowed.

Charity Gambling

In addition to Svenska Spel there are also four other major organisations that offer lottery games. The Folkspel is a non-profit organisation developing lotteries on behalf of its 77 member voluntary associations and clubs, such as Democratic Party and Swedish Sports Confederation, and is a part of Arvidsson and Yrlid. Folkspel, the organisation that offers BingoLotto and gives all the proceeds back to the public sector (its members). During 2002 Folkspel Lotterier’s sales fell slightly to SEK 3.0 billion (€318.4 million).

There are a number of regional and local lotteries run for the benefit of voluntary associations and clubs. During 2002 these lotteries generate sales of SEK 9 million (€955,300), down from over SEK 70 million (€7.4 million) during the early 1990s. (Source: GBGC Report)

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