Sweden is poised to tighten its grip on unlicensed gambling. Just over a week ago, the Swedish government published a memorandum proposing a fundamental change to the Gambling Act (Spellagen), aimed at cracking down on platforms operating in a grey zone between the licensed and unlicensed market.
But the long-awaited update is unlikely to solve some of the market’s deeper-rooted struggles relating to the proliferation of illegal gambling.
The changes were proposed by the Ministry of Finance’s investigator, Marcus Isgren, who authored the report outlining amendments designed to strengthen the regulatory framework.
If enacted, the changes – scheduled to take effect on 1 January 2027 – would represent the most significant reform of Sweden’s regulated gambling regime since its re‑regulation in 2019.
The proposal would redefine which gambling services fall under Swedish law, significantly expand the administrative tools available to regulators, and shift responsibility for compliance from the state to the operators.
A positive response to Sweden’s Gambling Act update
For a market grappling with falling channelisation since 2019, this could be a turning point.
Anna Johnson, CEO and president of Svenska Spel, the state-owned operator, celebrated the report, as have other prominent stakeholders in the market.
“The investigator’s proposals are long-awaited and welcome. We have long pointed out that the regulations around illegal gambling need to be tightened. It’s about improved protection for consumers, but also about safeguarding trust in the entire Swedish gambling market. Ensuring that gambling is conducted in a responsible and sustainable way is the very foundation of our operations,” Johnson said.
A spokesperson for the Swedish Gambling Authority, Spelinspektionen, similarly praised the government’s review. In a comment to iGB, the regulator said: “We have brought to the government’s attention the need to amend the scope of the Gambling Act with regard to online gambling. We therefore view the investigator’s proposal positively, as it strengthens our ability to work more effectively against unlicensed gambling.”
Change is positive
One of the architects of the longstanding industry pressure that led to this reform is Gustaf Hoffstedt, CEO of industry trade body BOS. Speaking to iGB, Hoffstedt struck a positive tone, even if it is unlikely the law will come into force for at least another year.
“I’m all fine with my patience right now, when I can notice that we are ticking boxes during the path. I don’t have a problem with waiting until 1 of January 2027, because, as an ex-politician myself (Hoffstedt represented the Moderate Party in the Swedish parliament between 2010 and 2015), I am fully aware that the legislative process takes that time. What was so frustrating was the initial five or six years, when nothing happened,” he said.
Hoffstedt supports the shift to a participation-based model, but his optimism is measured. The reform, he estimates, might improve channelisation – but not enough to meaningfully stem the flow of Swedish players to unlicensed sites and barely making a dent in the current leakage to the unlicensed market.
“From the industry’s point of view, we are quite certain that it will substantially contribute to a strengthened channelisation. However, substantially means maybe two or three percentage points. Even if this reform is successful, it certainly doesn’t solve the general problem.”
Consumer appeal the real challenge
According to Hoffstedt, the deeper issue is not legal enforcement, but consumer appeal. Sweden’s licensed market, he says, lacks the attractiveness needed to retain players – especially in a sector driven by thrill, incentives and fast-moving innovation, with offshore platforms offering more bonuses, more games and faster payouts.
“We have an alcohol monopoly in Sweden that is easier to uphold since alcohol is a physical product,” he notes. “But I can just take my smartphone and gamble on hundreds of illegal, unlicensed gambling companies.”
The legislative instinct across Europe, he argues, is to build legal walls – through DNS blocking, payment restrictions and repressive licensing regimes. But this alone won’t work.
“This review was a niche product. But we’re now advocating for a general, broad inquiry into how to improve the channelisation of the Swedish gambling market.”
He hopes the government will launch such a review before the next general election in September 2026. “That could be the most valuable contribution to a functioning market.”
Reframing the law: what’s in Sweden’s Gambling Act update?
Under current law, online gambling operators fall under Swedish jurisdiction if they target the Swedish market. This so-called “riktningskriteriet”, or “directional criterion,” relies on visible cues – such as use of the Swedish language, local currency (SEK), or Swedish branding – to establish intent.
However, many foreign operators have circumvented the rule by offering platforms in English, using the euro, and avoiding overt national markers. In doing so, they’ve been able to legally accept Swedish players without a licence – remaining outside the regulator’s reach.
For years, this loophole in Sweden’s Gambling Act has enabled player leakage to unlicensed operators. According to BOS, which represents 19 gambling companies operating in the market, prior to the re-regulation, channelisation was slightly below 50%. Immediately after the re-regulation it was plus 90%. But those numbers quickly dropped.
Spelinspektionen currently estimates it to be at 85%. Channelisation for online casino in Sweden is estimated at 72%–82% – a number which BOS describes as “catastrophic”.
In comparison, channelisation in neighbouring Denmark, where the market is significantly more liberal, is estimated at around 90%, with an equal distribution between different product groups.
The core reform is a shift from asking whether a gambling site is targeting Swedish users to whether people in Sweden participate in the game. Under the new law, it wouldn’t matter how the site is marketed – if someone in Sweden can play, the law applies.
From intent to activity
Effectively, the legal burden would shift from proving intent to target to proving active exclusion. Operators wishing to stay outside Swedish jurisdiction must implement “appropriate and effective measures” to block Swedish residents from accessing their platforms. Even sites with no Swedish branding or language – if accessible to Swedes – could face legal action.
These are the key enforcement shifts in the amendment:
- Responsibility: Operators will be required to take “appropriate and effective measures” to prevent Swedish residents from participating – not only to avoid targeting them.
- Exemption test: To fall outside the law’s reach, an operator must show that exclusion measures have been implemented – not merely that they do not target Sweden.
- Promotion ban expansion: The prohibition on promoting unlicensed gambling would extend to payment processors, financial services, administrative or technical support and other intermediaries facilitating unlicensed operations.
- Presumption of participation (for payments): Payment intermediaries that handle transactions linked to unlicensed gambling must assume Swedish residents are participating from Sweden unless clear evidence suggests otherwise.
- Criminal liability adjustments: The criminal provisions of Sweden’s Gambling Act would be updated to explicitly cover unlicensed gambling and the promotion thereof, under the new participant‑based framework – potentially expanding liability to those who knowingly facilitate unlicensed activity.
Is there an appetite for deeper reform?
According to Hoffstedt, a big issue is also that unlicensed operators are sophisticated enough to mimic the branding of legal operators, so that even well-meaning consumers are gambling on illegal sites without knowing it.
“That’s one of the main problems in Sweden,” he said. “And it’s actually not easy to solve, because crooks can, for instance, just steal the sign of the Swedish Gambling Authority and place it on their homepage.”
And while the government has run limited public awareness campaigns, Hoffstedt believes more could be done.
“The Gambling Authority launched one or two such campaigns, but I do think we should do more – perhaps within the industry as well. I know the Danish trade association launched their own campaign. Maybe that’s something we should look at too.”
If passed, as is expected, the new law would nevertheless mark a major turning point in Swedish gambling enforcement. But its true effect remains to be seen.
Without reforms that make Sweden’s licensed market more attractive to consumers – alongside stronger enforcement – the most muscular legislation may still prove leaky, he stresses.
“The proof of the pudding is in the eating,” Hoffstedt said.
With a general election in Sweden looming next year, the political appetite for deeper reform may soon be tested.
The Swedish government wants to rewrite the rules of online gambling with a radical amendment to its Gambling Act. But tougher laws might not fix a market that is losing its appeal.