Riksrevisionen, the National Audit Office of Sweden, has concluded that Gambling Inspectorate Spelinspektionen lacks a ‘sufficient level of efficiency’ on the risk analysis and supervision of Swedish Gambling. 

The determination of the Inspectorate’s shortcomings are made due to the changes of the gambling market since 2019, the year in which the Riksdag relaunched Swedish gambling under the laws of the new Gambling Act.

The past five years…

The National Audit Office has revealed that in the five years since the opening of the market, evidence suggests that Spelinspektionen has been ‘less effective than desirable’ in its duty to carry out the necessary amount of operator inspections. 

“Supervision of gambling that is associated with high risk is particularly important,” said Deputy Auditor General Claudia Gardberg Morner. “This includes commercial online gambling and betting, which should be controlled much more. It is also important to exclude illegal gambling from the market.”

“The number of inspections of commercial online gambling and betting has not been sufficient in recent years. The Swedish National Audit Office considers that the perception and credibility of the system is directly linked to the regular supervision of all types of licences and forms of gambling,” the report further outlined.

Furthermore, a significant shortcoming has also been identified In the cases where operators have been subjected to regulatory supervision by Spelinspektionen.

According to the Audit Office, there has been a single follow-up of the results of supervisory decisions since 2019. Therefore, the regulator lacks the necessary knowledge whether the deficiencies it has identified have been rectified.

Overloaded

Part of the reason behind these irregularities is attributed to an ineffective resource management process, the Audit Office went on to explain, which has led to Spelinspektionen prioritising tasks like licence application reviews and completing government assignments at the cost of conducting its supervisory duties to the desired extent.

A recent example of this is the implementation by Spelinspektionen of a revised methodology for calculating the channelisation rate of the country’s online gambling market – a mandatory development mandated by the Swedish government in 2023.

“The Swedish Gambling Authority has given supervision lower priority in relation to competing tasks…that have been added gradually without the addition of corresponding resources to the Authority. All in all, this has contributed to the limited scope of supervision,” the report noted.

Hedvig Tängdén, Project Leader for the Audit, further commented: “In this situation, it is particularly important that the supervisory resources are used where they bring the most benefit.

“To achieve this, the Authority needs to base its supervisory planning on systematic risk analysis. This is not currently the case.”

Planning Ahead

Included in the Audit Office’s recommendations addressing the Swedish government is the facilitation of all necessary measures to ensure that Spelinspektionen can effectively carry out its supervisory responsibilities, as well as the continuous filing of supervisory reports to be shared with the Riksdag, Sweden’s highest decision-making assembly.

The guidance for the Swedish Gambling Authority states that it should incorporate a longer-term planning process into its supervisory activities, better resource allocation management, as well as more refined follow-up procedures.

Spelinspektionen has previously acknowledged its shortcomings in resources needed to carry out regulatory evaluations, which in 2023 saw the Inspectorate’s budget increased by a further SEK 2.4m (€200,000) allocated towards the inspection of online licences and standards.

Spelinspektionen Responds

Responding to the Audit Office’s conclusion, Camilla Rosenberg, Director General of Spelinspektionen, commented: “We welcome the National Audit Office’s review, and since the re-regulation [we] have carried out ongoing change work and still have work to do.

“Several issues are still awaiting resolution in court. The Authority has also received increased budget funds for 2024 that we requested, which is a decisive factor in being able to develop the business further.”

The Industry Says….

Sweden’s Trade Association for Online Gambling (BOS) has welcomed the audit’s review, expressing agreement with the conclusion that Spelinspektionen should be given more support when trying to enforce its role as a regulator.

Some of this support includes additional clarity around what is considered to be legal and illegal gambling under the Gambling Act.

A current inconsistency in the framework dictates that unlicensed gambling companies offering games in English and using the Euro as a currency are legal, while unlicensed operators using the Swedish language and the Swedish krona as a payment method are considered illegal.

This creates a grey area which can lead to unwanted consequences.

Gustaf Hoffstedt, Secretary General of BOS, said: “That today’s gambling legislation allows such extensive parts of the gambling market to operate without a licence is unsustainable. In front of both the current and previous governments, we have advocated an expansion of the Gambling Act’s scope of application.

“In this way, it would become generally illegal for gambling companies that lack a Swedish gambling licence to accept Swedish gambling consumers, and as a consequence these companies must geoblock Sweden. It is very welcome that the National Audit Office reasons in a similar way in the report published today.”

Source