Gambling Firms Say Swedish Gaming Regs Violate EU Law- Wrong Direction

Gambling companies were quick to criticize the report issued by the Swedish National Gambling Consultation earlier this week which recommended that state-owned Svenska Spel retain its monopoly on online gaming, and included proposals to introduce IP and payments blocking provisions alongside sports betting licensing (for odds games and tips games) to be opened to private operators by 2011, with the exception of betting on horse races (click here for related article).

Criticism centered around three main points:

BETSSON BLASTS SWEDEN'S REPORT

Betsson's CEO, Pontus Lindwall, said his company and other major operators had wasted a considerable amount of time and energy by providing the Swedish commission with expert input on how best to set up a regulated and open market.

"We were hoping for some kind of harmonisation where we could compete on a level playing field, whether it be taxes, access to market and so on." Lindwall added, "Instead, the Inquiry has gone completely the other way and wants to allow only Svenska Spel the opportunity to offer all interactive gaming products except for online sports betting.

"They talk about restricting the games offered by private operators when in fact it is about protecting the state finances. As long as the regulations are this discriminatory they will be a non-starter."

LADBROKES PROMPTLY LASHES OUT

Soon after publication of the controversial report, Ladbrokes posted a commentary on their website describing Sweden's proposed gaming regulations "as protectionist and anti-competitive".

John O'Reilly, Managing Director of Remote Betting and Gaming at Ladbrokes, said Sweden's gaming regulation recommnedations are a last-ditch attempt to avoid being hauled into the European Court of Justice for protectionist and unfair betting and gaming laws.

He also criticized the report, saying it seeks to extend the reach of the monopoly to cover online gaming including poker and bingo and further enshrines protection in land-based lotteries, slot machines, casinos and horseracing:

"None of the EU principles of proportionality or free and fair competition across border have been taken into account in this paper - it is more monopoly, not less. The impact will be to protect Government revenues, penalise competitors and ensure a negative effect on the consumer."

FIRMS CLAIM LICENSING BETTER PROTECTS CITIZENS, AT PRESS RELEASE YESTERDAY

At a press conference yesterday in Stockholm, four Scandinavian-facing operators: Expekt, Unibet, Betsson and Ladbrokes, criticized Sweden's gaming report's recommendations, challenging its foundation, which rests largely on protecting its citizens from problem gambling.

Betsson chief executive, Pontus Lindwall, suggested Sweden was trying primarily to protect state coffers. Petter Nylander ,as head of Unibet, went further to say that Sweden's Ministry of Finance had contributed much towards the proposed regulations, so they would retain as much gaming-related revenues as possible.

At the press conference, the firms presented findings of an independent study jointly commissioned by the gambling companies from the Swedish Retail Institute which showed that problems arising from gambling addiction could be handled more efficiently via a licensing system and by revising taxes to a lower rate between 0.2 percent and 2 percent of stakes versus the current monopoly tax rate of effectively about 20 percent.

The Swedish Retail Institute study showed that the Swedish government's continued protection of the Svenska Spel gaming monopoly is economically short-sighted. An article on Online-Casinos.com quoted that the Swedish Retail Institute study detailed how "the present system currently costs SEK 5 billion annually in efficiency losses, and that the cost savings, lower optimal gambling tax and increased winnings paid to players under a licensing system would result in an additional SEK 4 billion of consumer spending being ploughed back into the economy on an annual basis."

"The report also warned that the monopoly system left the government little room for manoeuvre should revenues fall, as raising tax rates would make conditions less favourable than elsewhere, discouraging companies from entering the market."

At the press conference, the four gaming firms added that Sweden's current and proposed gaming regulations violate European Union law and deprive Swedish residents the right to choose with which gambling company to engage.

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