Swedish inspectorate holds no opinion on tax rise

Spelinspektionen, Sweden’s Gambling Inspectorate, holds ‘no significant opinion’ on the 2024 Budget proposals to increase taxes on the gambling sector.

As announced by the memorandum of the Budget 2024, in the Spring of 2024 the Riksdag will debate increasing the gambling tax rate from 18 to 22% of gross gambling revenues (GGR).

Should the proposal be approved, the 22% GGR tax rise will come into effect from 1 July 2024.

The Swedish government estimates that the tax rise could raise a further SEK540m (€45m) generated from the gambling sector.

The tax rise is independent of the government’s ongoing review of Swedish gambling rules, standards, and consumer protections.

However, a tax increase was endorsed as the Swedish government believes that the gambling market has “stabilised since its reregulation in 2019.”

In submitting its feedback on the proposals, Spelinspektionen notes that increased taxes could influence the ‘channeling rate’ captured by the regulated market, which the government seeks to maintain at 90%.

Of significance, Spelinspektionen noted, “there have been observable changes in the gambling market, with growth from the third quarter of 2020 to the first quarter of 2023.”

In its latest market update, Spelinspektionen observed a 1% decline in GGR from licensed operators (online and land-based) to SEK 6.7bn. The inspectorate cited that the decline was most pronounced among licensees who pay gambling tax, which suggests a potential decrease in the tax base.

The Swedish Trade Association for Online Gambling – Branschföreningen för Onlinespel (BOS) – has argued that the proposed tax increases don’t take into account the current state of the market and the future it is heading toward. 

The trade body stands by its independent assessment that the real channelisation rate of Swedish online gambling stands at “77%, with some online casinos as low as 72%”.