Sweden's government, Regeringen, has put forward a proposal to increase the country's gambling tax rate from 18% to 22% of gross gaming revenue (GGR).
If this proposal receives approval, the higher tax rate will be implemented in Sweden starting from July 1, 2024. Regeringen believes that such a move could generate an additional SEK540.0 million (£39.3 million/€45.5 million/$48.4 million) in tax revenue annually.
The decision to raise the tax is grounded in the belief that the market should have stabilized since its re-regulation in 2019 when Sweden opened its online gambling market to operators, allowing them to apply for licenses and legally offer gambling services in the country.
Additionally, Regeringen has expressed concerns about the channelization rate in Sweden and the impact of this tax rate on the market. Regeringen argues that a tax rate exceeding 20% will help achieve a channelization rate of at least 90%.
"The current tax rate of 18% has been in place since the Swedish gambling market was re-regulated in 2019," noted Regeringen. "The gambling market has since stabilized, and channelization has significantly increased. Measures have also been taken to exclude unlicensed gambling from the Swedish market, which came into effect on July 1, 2023.
The reasons for caution when setting the tax level should therefore not be as strong now as during the re-regulation. An increase from 18% to 22% is judged to be at a suitable level to strengthen the financing of government activities without having too great an impact on companies and the size of the tax base."
However, the news of this proposed tax increase has not been well-received by the Online Gaming Industry Association (BOS). Gustaf Hoffstedt, the Secretary-General of BOS, criticized the proposal and called on the government to reconsider its plans.
"The government's announcement is deeply disappointing," Hoffstedt stated. "Above all, it shows that the government does not understand or has not taken to heart the nature of the market it is set to govern. Even less has the government understood the vulnerable position that the market is in."
Hoffstedt also referenced recent BOS research on channelization, noting that 77% of Sweden's online gambling market is currently channelized, a rate BOS described as "critically low."
"We were recently able to show that channelization in the Swedish gambling market is 77%,"
Hoffstedt said. "Some gambling verticals, including online casino, are as low as 72%. The trend is also declining, in other words, channeling decreases over time. We are already far from the state's goal of at least 90% channelization. If this tax increase is approved by the Riksdag, we will soon be down to the channelization we had before Sweden re-regulated its gambling market in 2019.
A re-regulation that took place because Sweden had such a low channelization at the time. Sweden's government must perform much better than this. There is still time to withdraw the proposal."
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