The Beginning of the End for Sweden's Online Gambling Monopoly

The ruling party in Sweden has decided to end their support for the government's online gambling monopoly. At a party conference in Gavle over the weekend, the ruling Moderate party voted to de-monopolize the country's gambling industry and to privatize Svenska Spel, the country's government-owned gaming company.

Up until now, the official Moderate party line has ruled out privatization of the gambling industry in the European Union nation, but after convincing arguments from Tomas Tobe MP, it appears that the Scandinavian nation will follow European Commission directives to allow the free movement of EU services within their borders.

Tobe told delegates Sweden must abolish the current monopoly and join England and Italy in regulation of the industry instead through a licensing system. To counter balance a possible increase in gambling, Tobe said funds should be allocated to problem gambling research and establishing risk-minimization controls.

Speaking to a Gaming Intelligence Group reporter at the close of the conference, Tobe said the decision was an important one which will now serve to facilitate discussion between the ruling parties in Sweden as well as between the state and foreign gambling companies.

"By December 2008, an in-depth report on the gambling market will be released following an investigation by Jan Nyrén, legal counsel of the police authority, but the party congress did not want to wait for this and voted for change to take place more rapidly", he said.

The Moderate's have joined the other ruling parties in publicly supporting the end of the gambling monopoly. Sweden's ruling coalition government is comprised of the Moderate's, the Peoples' Party, the Centre party and the Christian Democrats. Only the Christian Democrats remain opposed to regulation and privatization.

There is almost no doubt that European Commission pressure is responsible for the decision. Tobe rightly pointed out it would be preferable for the government to address the issue on its own initiative before being compelled to abolish the monopoly at a later date by the European Court of Justice.

Tobe said the government will work with online gambling companies in order to establish an effective method of taxation rather than a broad percentage of turnover based approach.

Svenska Spel generated over 500 million Euros in profits last year and if publicly listed as expected, the company could be valued at almost 7 billion Euros, which would make it double the size of Ladbrokes Plc. Granted, Svenska Spel's profits are largely attributable to a lack of competition, a situation that will be altered by an influx of foreign gambling operators.

Svenska Spel currently owns and operates the only five operational casinos in Sweden.

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