Sweden Set to Increase its GGR Tax by 4% Next Year: How Will iGaming Brands be Impacted?
Despite being the home of many world-renowned online casino game developers, like NetEnt and Yggdrasil Gaming, Sweden was one of the more recent major European markets to join the iGaming scene. This came with the re-regulation of the market on January 1, 2019, which opened the doors to a licensed scene for online gambling.
At the time, Sweden laid down a tax rate of 18 percent on gross gambling revenue to all licensed gambling companies operating within the country. It’s established a consistent status quo that’s led to growth in the industry and a diverse and competitive gaming space. Now, entering five years under the new rules, the tax rate is about to increase.
Significant bump to the tax rate in Sweden
Online gambling has been a rousing success in Sweden since it launched. Under the watchful eye of the nation’s regulator, Spelinspektionen, revenues hit SEK24.8 billion (€2.34 billion) in its first year. By 2021, that figure had already reached SEK26 billion (€2.22 billion), and last year, further growth was seen. Marking a five percent rise, operators overall reported a revenue increase to SEK27.4 billion (€2.34 billion).
Now, with a further increase in revenue expected for gambling operators in 2023, the Swedish government has seen it timely to increase the tax rate. The move will increase the tax on gross gaming revenue – found by calculating the amount bet minus the amount that was won by players – from 18 percent to 22 percent. The new tax rate is expected to come into play in July 2024.
Minister of Finance Elisabeth Svantesson has said that the aim of the increase is to create balance. As the gambling market in Sweden has proven itself to be stable in its years of operation, there isn’t a fear that a tax bump will disrupt the industry. Instead, the Swedish government will be able to increase its income from the regulated market while not impacting the operators too seriously.
A resilient and popular sector
One of the reasons behind Swedish re-regulation was the number of players who’d gamble at unlicensed platforms. Now, thanks to the open approach of the country’s regulator, around 75 percent of Swedish players are said to be betting at licensed casinos. You only have to look as far as the list of all of the new casinos joining the field to see that there’s plenty to go around.
In fact, there are so many new casinos getting licenses to operate in Sweden that one of the tips for winning at an online casino is to grab the welcome bonuses from new casinos. Free spins and deposit bonuses are commonplace, but one of the most sought-after is the no-wagering bonus. These bonuses pay out their winnings in real money. Alternatively, there are the no-deposit bonuses, which are completely free to claim at new casinos.
It’s clearly a very competitive space, which can only present a player-friendly environment. As it stands, however, players can only get one bonus per license holder. Some experts see this as changing down the line, but for now, it’s almost as though players are encouraged to shop around, which can both be listed as a pro and con. It’s a pro because the flashiest welcome offer won’t always win, but a con as loyalty can’t be rewarded in the traditional way just yet.
Given the amount of interest from new operators and players, the bump in tax doesn’t look set to hurt the industry significantly, or perhaps even at all. Revenues will take a hit initially, but the rate of growth is still expected to be high over the coming years.
