The Swedish government has put forward a proposal to raise the tax rate applied to gross gambling revenue (GGR) from 18 percent to 22 percent, effective from July 1, 2024. The move aims to generate an additional SEK 540 million (€45.5 million) in annual tax revenue. The government believes that the Swedish gambling market, which underwent re-regulation in 2019, has now stabilized, making this adjustment feasible.
Key Highlights:
Tax Hike Rationale: The government’s decision to increase the tax rate on GGR is rooted in the belief that the gambling market has reached a stable state, accompanied by substantial channelization gains. The measure aligns with new initiatives designed to exclude unlicensed gambling operators from the Swedish market, which took effect on July 1, 2023.
Financial Boost: The proposed tax hike aims to strengthen government finances while balancing its impact on industry stakeholders and the tax base. The government asserts that raising the tax rate from 18 to 22 percent is a suitable level to achieve this objective.
Industry’s Response:
Industry Criticism: The online gaming industry association BOS (Branschföreningen för Onlinespel) has criticized the government’s proposal, describing it as “deeply disappointing.” BOS Secretary-General Gustaf Hoffstedt emphasized that the government appears to lack an understanding of the market it regulates, particularly its vulnerability.
Channelization Concerns: BOS has highlighted that only 77 percent of Sweden’s online gaming market is channeled toward licensed offerings, well below the state’s goal of achieving at least 90 percent channelization. Online casino verticals, in particular, exhibit lower channelization rates, which are decreasing over time. The tax increase, if approved, could exacerbate these challenges.
Boosting Regulatory Efforts:
Increased Funding for Spelinspektionen: In addition to proposing the tax hike, the Swedish government plans to provide extra funding to the national gambling regulator, Spelinspektionen, in the coming financial years. An additional SEK 10.8 million (€906,000) is allocated for 2024, with further increases to SEK 15.6 million in 2025 and SEK 18.6 million in 2026. The funds are intended to support Spelinspektionen’s efforts in tackling the unlicensed gambling market and foster closer collaboration with Sweden’s Financial Supervisory Authority.
Sweden’s proposal to raise the tax rate on gross gambling revenue seeks to bolster government revenues while recognizing the market’s stability. However, industry critics argue that the move could hinder efforts to channel players to licensed operators, potentially undermining the state’s regulatory objectives.