When Sweden re-regulated its gambling market in January 2019, expectations were high. The legal framework was broadly based on the Danish system, which was considered to have successfully managed to balance market competitiveness with strict consumer protection standards.
A high channelisation rate – the share of gambling activity taking place with licensed operators – is central to the success of any regulated market. Prior to re-regulation, the Swedish government set an ambitious target of 90% channelisation. Initially, rates were considered strong in Sweden, but recent reports show a worrying decline.
Consulting firm H2 Gambling Capital has estimated the overall channelisation at around 70%, with online casino dropping as low as 62%. The Swedish Gambling Authority published new figures on 1 September 2025, which paint a somewhat better picture at 85% overall, but still just 72% for online casino based on internet traffic. It can be concluded that channelisation numbers now consistently fall short of the government’s target.
Falling channelisation undermines the very objectives of consumer protection, as players on unlicensed sites are not subject to any of the mandatory responsible gambling measures, tax revenue decreases and the risk of criminal activity increases.
How did we get here?
Several factors may explain the decline in channelisation rates. Internationally, unlicensed crypto casinos and skin betting platforms have gained popularity, posing a general challenge to the licensed industry. For Sweden, there are further factors that may have inadvertently weakened the licensed market. For example, the current scope of the country’s Gambling Act is based on a targeting criterion which allows unlicensed operators to passively accept Swedish players as long as their website does not target the Swedish market.
At the same time, licensed operators’ product offerings are restricted to traditional games, excluding more innovative and popular options such as crash games. Bonus restrictions also limit licensed operators to one single welcome offer per player, with the aim of curbing excessive gambling. While these restrictions are all well intended, they risk making the regulated market less attractive to consumers.
Furthermore, strict regulatory enforcement actions against licensed operators, particularly around responsible gambling and anti-money laundering, risk leading to defensive business practices where operators may choose to act conservatively and limit recreational players to avoid sanctions. With no graduated enforcement ladder, even minor breaches trigger severe penalties, which may discourage innovation and weaken competitiveness, pushing players toward unlicensed alternatives.
Meanwhile, offshore operators continue to target consumers aggressively through digital channels such as affiliate sites and streamer marketing. This, in combination with relatively weak enforcement tools against unlicensed operators, means consumers are exposed to unlicensed websites and able to access and transact with them without any major issues and restrictions.
What’s next?
Sweden’s declining channelisation is a multi-faceted problem. While the regulatory framework was designed to ensure consumer protection and market integrity, several factors have unintentionally reduced the attractiveness of licensed operators. Combined with the growing appeal of unlicensed international alternatives, these factors have placed Sweden’s regulatory model under significant strain.
On 24 September, the government published a ministry publication proposing several measures to strengthen the Swedish gambling market, including:
- Replacing the targeting criterion with a participation criterion, so that all gambling where people in Sweden can participate falls within the scope of the Gambling Act.
- Extending the prohibition on aiding and abetting illegal gambling to cover payment solutions and similar services.
- Introducing a presumption rule, requiring payment intermediaries to assume participants are located in Sweden if they are Swedish residents.
- Adjusting criminal liability for unlawful gambling activates and the aiding and abetting thereof.
These measures, proposed to take effect on 1 January 2027, are positive and can be one step towards strengthening the legal market. However, success also depends on addressing broader challenges so that Swedish consumers are able to enjoy a competitive legal offer while not being exposed or encouraged to gambling excessively. Reversing Sweden’s decline in channelisation therefore requires a comprehensive strategy that balances consumer protection with market competitiveness.
To support this, the trade association Branschföreningen för Onlinespel (BOS), has commissioned a report prepared by Nordic Legal. The report, which will be presented in Stockholm on 21 October 2025, will analyse the Swedish and Danish markets and present 19 specific recommendations aimed at strengthening the Swedish licensed gambling market.
Sweden’s fall in channelisation is not irreversible, but it does demand prompt and pragmatic action. The lessons are clear: regulation that prioritises consumer protection must also ensure the regulated market remains competitive and appealing. Without such action, players will continue shifting offshore, undermining policy goals and public trust.
Maria McDonald is head of office for the Swedish branch of Nordic Legal, a firm specialised in gambling-related legal and compliance matters.
She also has extensive experience working with media, tech and dispute resolution and has, during the majority of her career, worked as in-house legal counsel and as the head of legal in Unibet and in Lagardère Sports.
McDonald has also previously acted as chair of the Danish Online Gambling Association (DOGA) and treasurer of the Swedish Branschföreningen för Onlinespel (BOS).
The post The path to recovery for Sweden’s channelisation rate first appeared on EGR Intel.
Nordic Legal’s Maria McDonald on how “prompt and pragmatic action” can push the nation’s channelisation rate above the government’s 90% target
The post The path to recovery for Sweden’s channelisation rate first appeared on EGR Intel.