Every Tenth Gambling Krona Unlicensed: Is Sweden’s Channelization Policy Working?

Sweden’s ambition to steer nearly all gambling through licensed operators is faltering. New data from Spelinspektionen show that roughly 10% of gambling revenue now flows to unlicensed offshore sites, raising urgent questions about enforcement gaps, payment blocks and the future of the Nordic regulatory model.

The 2019 Licensing System Meets Its First Stress Test

When Sweden re-regulated its gambling market on 1 January 2019, the government set a clear target: channelisation of at least 90% of gambling expenditure into licensed channels. The new Gambling Act (2018:1138) created a licensing framework for online casinos, sports betting and lotteries, enforced by Spelinspektionen. For the first three years, official channelisation figures hovered between 92% and 95%. But the 2023 annual report from the regulator confirmed a drop to 90%, meaning every tenth krona now ends up with unlicensed operators.

The decline is not a statistical blip. It reflects a structural shift: aggressive marketing by offshore sites, easier cross-border payment methods and regulatory loopholes that allow foreign operators to target Swedish consumers without a licence. “The channelisation trend is moving in the wrong direction,” noted Spelinspektionen’s director general Camilla Rosenberg in a 2024 press release. The regulator estimates that unlicensed gambling generated roughly SEK 2.5 billion in 2023 – money that bypasses Swedish taxes, consumer protections and responsible gambling obligations.

Why Licence Evasion Persists: Payments, B2B Loopholes and EU Law

Sweden’s primary tool against offshore operators is the payment blocking system introduced in 2019 and expanded in 2023. Under Chapter 3, Sections 11–12 of the Gambling Act, Spelinspektionen can order payment service providers to block transactions to unlicensed gambling sites. Yet enforcement has been patchy. A 2024 report from the Swedish National Audit Office (Riksrevisionen) found that the blocking regime covers only about 60% of identified illegal transactions, partly because offshore operators constantly change IBAN numbers and use intermediary payment processors.

Another loophole concerns B2B providers. Since July 2023, Sweden requires a separate licence for software suppliers to the licensed market. But many offshore operators use servers and game engines based in Malta or Curaçao, outside Spelinspektionen’s direct reach. The European Union’s freedom to provide services under Article 56 TFEU limits Sweden’s ability to block or penalise companies registered in other member states, unless they actively target Swedish consumers. The European Court of Justice jurisprudence (e.g., Pfleger, C‑390/12) allows restrictions only if they are proportionate and non-discriminatory – a test that Sweden’s payment block regime has yet to face in Luxembourg.

Nordic Comparison: Denmark Succeeds, Norway Struggles

Sweden is not alone in fighting channelisation erosion. Across the Nordics, approaches diverge. Denmark, which re-regulated in 2012 under its Gaming Act, has maintained a channelisation rate of roughly 88–90% according to Spillemyndigheden. Denmark uses a combination of a reasonable tax rate (20% for online casinos), a voluntary deposit limit database (Rofus) and active enforcement against illegal websites.

Norway, which retains a state monopoly under Norsk Tipping and Norsk Rikstoto, has a stricter regime but still sees about 15% of turnover going offshore. Its payment freeze system, based on section 2-4 in the Pengespilloven, has been challenged by EU/EEA freedom-of-trade arguments. Finland, the last Nordic holdout, is finally moving to a licensing model in January 2026 – a clear admission that monopoly regimes struggle even more to contain offshore gambling.

Regulatory Gaps and Consumer Protection Risks

The channelisation decline directly harms consumer protection. Unlicensed operators are not bound by Sweden’s mandatory deposit limits, break alerts or self-exclusion database (Spelpaus). According to a 2024 study from Folkhälsomyndigheten, problem gambling prevalence has stabilised at around 1.5% of the adult population, but the share of problem gamblers using only unlicensed sites has doubled since 2019. “These players are invisible to the system – they cannot be helped by Spelpaus or flagged for high-risk behaviour,” said a researcher at the Public Health Authority.

The Swedish government has responded with legislative proposals. In December 2023, the government referred a memorandum proposing tighter B2B obligations and a requirement for payment intermediaries to proactively block transfers to unlicensed sites. A new law is expected to take effect by 1 January 2026. However, the industry and consumer groups have criticised the slow pace. Meanwhile, the Riksdag’s Committee on Social Insurance has called for an evaluation of the tax rate, which at 18% is among the highest in Europe – potentially incentivising operators to avoid the licence. A 2023 report from the Swedish Agency for Public Management (Statskontoret) found that a tax cut could increase channelisation by 3–5 percentage points, though that idea remains politically controversial.

What the Future Holds: Coordination and Technological Arms Race

Nordic regulators are increasingly cooperating. In 2023, Denmark, Sweden, Norway and Finland signed a joint declaration to share intelligence on illegal gambling operators, coordinated through the Spelinspektionen-led Nordic Gambling Forum. At the EU level, the European Commission’s 2024 digital services package includes provisions that could force payment providers to more rigorously screen gambling transactions – but implementation is years away. For the Swedish-market angle, see utländskacasino.se published by utländskacasino.se.

On the enforcement side, the arms race is technological. Offshore sites now use cryptocurrency wallets and e-wallets to circumvent bank blocks. Sweden’s Financial Supervisory Authority (Finansinspektionen) has been asked to require reporting of crypto-transactions linked to gambling, but no regulation has been tabled yet. The fundamental question remains: can a national licensing system ever achieve 95%+ channelisation in a globalised digital economy? The early evidence suggests that without much tougher payment enforcement, a lower tax rate, and better cross-border coordination, Sweden may have to accept a permanent 8–12% leakage. That would still be better than most EU member states – but it falls short of the original regulatory promise.

Sources

• Spelinspektionen – Official channelisation reports and regulatory decisions
• Folkhälsomyndigheten – problem gambling prevalence data and reports
• Riksdagen – Government memorandum on B2B licensing and payment blocks (SOU 2023:14)
• Court of Justice of the European Union – Pfleger judgment (C‑390/12) on gambling restrictions
• Statskontoret – Report on tax effects on channelisation (2023)