Audit exposes inadequate oversight of Sweden’s gambling market

A new report from Sweden’s National Audit Office (NAO) reveals that the Swedish Gambling Authority (SGA) is failing to effectively supervise the country’s gambling market.

The report criticises the regulator for conducting too few inspections, failing to base its supervisory efforts on thorough risk analyses, and not following up on its decisions.

The NAO said that since the introduction of Sweden’s new Gambling Act in 2019, which brought in a licensing system for commercial companies targeting the Swedish online gambling market, the goal has been to ensure gambling takes place under public control.

The NAO reported that the biggest shortcoming is the authority’s lack of inspections, among both licensed and unlicensed operators.

“Supervision of gambling that is associated with high risk is particularly important. This includes commercial online gambling and betting, which should be controlled much more,” said deputy auditor general Claudia Gardberg Morner. 

Gardberg Morner also emphasised the need to combat the black market more effectively.

Poor resource allocation

The audit found that one of the major issues hampering effective oversight is the SGA’s resource allocation. 

The regulator, which has been assigned new tasks by the government, has been unable to devote sufficient attention to supervision, it suggested. 

Hedvig Tängdén, the audit’s project leader, pointed out that the lack of a systematic risk analysis when planning inspections has reduced the effectiveness of the authority’s efforts.

Another critical shortcoming identified was the SGA’s failure to follow up on its supervisory decisions. 

In the past five years, only one follow-up inspection has been conducted, according to the report, meaning the SGA does not know if identified deficiencies have been addressed.

Calls for clarity

Adding to the challenge is a lack of clarity in the Gambling Act itself, which has led to the emergence of a “grey market” in Sweden, the NAO stated. 

Gardberg Morner stressed the need for the government to clarify when online gambling requires a licence. “This would facilitate supervisory activities,” she said.

To strengthen the effectiveness of the system, the audit recommends that the government ensures the SGA is equipped with the resources it needs for comprehensive supervision.

Industry support

The Swedish Trade Association for Online Gambling (BOS) has voiced its support for the report’s findings, calling for a revision of the Gambling Act’s scope of application. 

According to current legislation, unlicensed gambling companies that do not use Swedish markers, such as language or currency, can legally offer their services to Swedish customers.

BOS secretary general Gustaf Hoffstedt criticised the current framework, stating: “That today’s legislation allows such large parts of the gambling market to operate without a licence is unsustainable.” 

Hoffstedt argued that the Gambling Act should be expanded to make it illegal for any unlicensed operator to target Swedish consumers, adding that such companies should then be required to geoblock Sweden.

SGA response

In response to the report, the SGA described the re-regulation of the gaming market as “revolutionary”.

The regulator agreed with the NAO’s assessment that there is still room for improvement in its supervisory activities. 

However, SGA director general Camilla Rosenberg (pictured) emphasised that the authority has been continuously working on improvements since re-regulation began in 2019.

 “We can look back on six intense years with new legislation, new actors, and new tasks under an entirely new regulatory framework,” Rosenberg said. 

She also noted that several legal issues are still awaiting resolution in court.

Rosenberg confirmed that the SGA has received additional budget funds for 2024, which she called a “decisive factor” in enabling the authority to continue improving its operations.

As part of its ongoing efforts, the SGA stated it has also made organisational changes this year to enhance environmental analysis and is prioritising the streamlining of processes, routines, and system support. 

The SGA has also focused on improving risk analysis and risk assessment in its business plan for the current year, ensuring it continues to adapt to the evolving gambling landscape.

The SGA repeatedly emphasised the need for additional resources.

Persistent calls for increased funding

In its 2023 annual report, the SGA highlighted that a large part of its supervisory decisions are still being appealed.

“This means that we have a number of ongoing court processes, which also usually last for several years in several instances and take up a significant part of our resources. 

“Our capacity to initiate and carry out new supervision is limited as a result,” the SGA said at the time. 

In 2022, the SGA raised the same concerns, and the Swedish government subsequently pledged to boost funding for the regulator over the following three years.

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