Government proposal an open invitation to illegal gambling sites

Kindred has today submitted its opinion on the memorandum on enhanced player protections as a result of Covid-19. In its opinion, Kindred highlights its concerns over a sharply reduced gambling market and weaker consumer protections as a result of the Swedish government's proposal.

On 23 April, the government presented a draft regulation for how to strengthen player protections as a result of Covid-19. Kindred has today submitted its opinion on the issue, criticising the absence of impact assessments in several areas. Kindred shares the concerns of several experts that the licensed gambling market will be significantly reduced as a result of the government's continued tightening of Sweden’s gaming regulations, which will lead to an expansion of the illegal gambling market.

“We are extremely concerned that the Swedish gambling market continues to shrink, a trend confirmed by both the Swedish Agency for Public Management (Statskontoret) and research firm Copenhagen Economics. What the government is now proposing will result in a continued decline in the gambling market and an erosion of consumer protections,” says Henrik Tjärnström, CEO Kindred Group.

“We need to be careful about introducing regulations that move customers away from regulated gambling companies towards unlicensed sites where Swedish authorities have no ability whatsoever of ensuring a high consumer protection. This is a negative development for customers, for the licensed gambling companies, and for society as a whole,” continues Henrik Tjärnström.

Kindred highlights the following comments in its opinion:

• There is no evidence in either the draft regulation or gambling companies' own data showing an increase in problem gambling due to Covid-19. Rather, the overall gambling industry (private and state-run) has experienced a drop in gambling activity. We are left to wonder on what evidence the Minister has based his alarmist hypothesis.

• New figures published by the independent research firm Copenhagen Economics show that every fourth krona played goes to the unlicensed market for online casino games. The industry forecasts that this percentage will increase by between 30 and 40 percent should the government’s proposal be adopted, with tougher restrictions on the licensed market increasing the risk of additional problem gambling.

• We welcome an increased focus by the government on combating the black market, but remain disappointed about the probable outcomes, as these proposals and tools have been available to the Swedish Gambling Authority (Spelinspektionen) for some time, yet nothing has happened in practice. On the contrary, we see things going in the wrong direction.

• The government has notified the EU Commission of the regulation and also called for urgent action, which differs radically from how the government has otherwise chosen to deal with the coronavirus crisis. It remains unclear why the gambling sector should be treated radically different from other social sectors.

• Give the Swedish Gambling Authority space to carry out its mission. The Gambling Authority should focus on channelling, as that is a basic prerequisite for a well-functioning licensing process. Therefore, it is important that the government demonstrate greater confidence in the Gambling Authority and give the agency more space to carry out its work.

• Since the government has not understood and taken into account the overall regulatory framework or conducted any impact assessment on the need for technical changes, license holders cannot change technical systems in the manner prescribed if they only have until 1 June to implement these changes. This forces licensees to choose which rules to violate. Not all rules can be followed if the proposal is implemented.

• Introduce measures that protect the integrity of the licensed market and properly protect vulnerable players. We suggest the government:

• • quickly implement B2B-licenses for suppliers and customer acquisition companies
  • consider further regulation of the instant loan industry
  • carry out powerful public awareness campaigns
  • clarify the Gambling Authority’s mission by requesting player data from gambling companies to facilitate fact-based assessments

Alexander Westrell, Group Head of Communications

073 7071686

alexander.westrell@kindredgroup.com

Peter Alling, Global Head of Public Affairs

072 2505287

peter.alling@kindredgroup.com

Kindred Group is one of the world’s leading online gambling operators with business across Europe and Australia, offering over 26 million customers across 11 brands a great form of entertainment in a safe, fair and sustainable environment. The company, which employs about 1,700 people, is listed on Nasdaq Stockholm Large Cap and is a member of the European Gaming and Betting Association (EGBA) and founding member of IBIA (International Betting Integrity Association). Kindred Group is audited and certified by eCOGRA for compliance with the 2014 EU Recommendation on Consumer Protection and Responsible Gambling (2014/478/EU). Read more on www.kindredgroup.com.