How Will Swedish Limitation on Bonuses Impact the iGaming market?

swedenSweden’s government has unveiled controversial new regulations for gambling companies operating within the country.

According to new rules, licensed gambling providers in Sweden can only offer bonuses, discounts or other financial incentives to players when they engage in one of their games for the first time. Therefore, all and any incentives except a welcome bonus will effectively become illegal. Aforementioned regulations are in Chapter 14, Section 9 of the Swedish Gambling Act (2018:1138).

Until now, the Swedish government has been vague about the specifics of the regulation. What exactly would be a bonus was relatively unknown. The law remains somewhat vague about the details, which leads to speculation and a divided community. Political and media pressure mounting forced Swedish authorities to make an official announcement. The government’s position is that in the eyes of the law all and anything except the actual winnings is a bonus.

A silver lining?

There’s an interesting moment with the new rule, as noted by Per Svensson from website. It appears that the updated law doesn’t see the existing player base of these gambling companies as exempt from this welcome bonus. The gambling commission regards the new regulation as a “clean slate” of sorts. This means that these players might still get a bonus in order to make up for the new limitations.

It seems very likely that in order to mitigate the negative effects these rules might have on their businesses, gambling companies will find other ways and/or loopholes to reward loyal players. Keeping customers satisfied but wanting more is a basic tenant of the gambling business. This means the providers will have to find a way to adapt to new market conditions, which they likely will.

The new regulations also mean higher security levels. “Pay ‘n Play” casinos leading the charge will not share your personal details with third parties. With new regulations in place, a quick verification will ensure that player details are protected from abuse.

The amount of spam will also decrease. Under the new law, the player base will not receive promos anymore. Customers who choose to do so will have to independently follow promotional pages in order to get this news. This will likely also increase customer satisfaction with gambling services since nobody really likes spam.

New regulation’s effects on the market

New five-year long licenses for commercial online gambling and betting will cost 400 000 Swedish Kronas each (link to the source). 700 000 is the stake to obtain both, which amounts to about 75 000 USD.

Gambling monopolies are becoming increasingly unpopular around the World since they’ve been proven time and time again to be a rather ineffective way of moderating the issue. Banning or monopolizing gambling encourages illegal dealings and lowers user safety. But perhaps most importantly, these decisions effectively divert money away from the country. To avoid legal ramifications, pretty much all of the gambling companies in these countries operate from outside the borders. This ensures that they will pay no taxes to the Swedish government.

In this new regulatory reality, it’s interesting to see how the situation unfolds. Both internally and regionally this is an important decision for Sweden. Norway and Finland are still dedicated to upholding their gambling monopolies. It’s unknown how gambling regulators in either of those countries will react if Sweden’s new system proves to be a financial and political success.

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