When Sweden announced its plans to regulate the finance market in January 2019, it became evident to major players that remaining outside of the regulated market would be more profitable than entering it. However, many believed that there would be a trade-off in terms of legitimacy, but it seemed like the only option as the government emphasized the importance of a high channelisation rate. Unfortunately, even before the outbreak of Covid-19, there were indications that the market was not functioning as intended, and the knee-jerk political response to the pandemic has only worsened the situation.
With the introduction of deposit limits and the implementation of a misguided central state-run portal to enforce them, it is no surprise that all signs point to an increasing number of players shifting from the regulated market to the unregulated market. As a result, smaller operators are targeting Swedish players without obtaining a license, while larger operators are questioning their decision to participate in the licensed regime. Analysts predict that this trend could lead to a significant shift away from the regulated market in the next five years, which would be a considerable failure for Sweden’s licensing system.
A similar debate is occurring in Portugal, where recent data suggests a growing number of players are also operating outside of the licensed system. Just like in Sweden, politicians in Portugal seem determined to tighten regulations on operators, despite contradictory evidence and assumptions about an increase in online gaming during the pandemic.
On a more positive note, Denmark has seen positive results since the beginning of its regulated market in 2012. An analysis of data up until last year demonstrates that the integration of online platforms can actually expand the overall size of the market rather than simply redirecting interest between different channels.
Source: Stephen Carter, Editorial director, InnovateChange
