In an effort to stay competitive in the ever progressing world of gambling, the Swedish government assembled the Commission on Gaming (Lotteriutredningen) and called on it to present a report suggesting ways the country can adapt. The goal of the commission was to present, in the light of the gaming policy established by Parliament (and taking into account current trends in the gaming sector), proposals for adapting Swedish regulations to market developments and developments in technology, as well as developments e-community law. Further, the commission was tasked with examining the impact of both current developments and the committee's proposals on public health and considering how they affect social protection in Sweden.
The report, titled "Gaming in a Changing World" (Spel i en föränderlig värld), was orchestrated by Jan Francke, the official investigator at the Ministry of Finance, the Ministry of Transportation and Communication and the Ministry of Justice. Numerous experts--representing the Finance Ministry (taxes), the Social Ministry (problem gambling, public health), the Foreign Ministry (community law) and the Gaming Board (control etc.)--contributed as well. The list includes: Maria Wennerberg Sedigh, Jörgen van der Stad, Monica Falck, Kerstin Norman, Leif Hansson, Jan Nyrén, Brita Löfgren Lewin, Bo G. Pettersson, Gunilla Paulsson Lindberg and Linda Haggren.
A number of changes have been proposed. The committee has considered the possibility of introducing legislation that would make it more difficult to offer gaming opportunities in Sweden from abroad, via the Internet and similar channels, but has concluded that this is not a feasible course.
The mandate has included an assessment of how the position of Swedish operators vis-à-vis their international competitors in the gaming market might be improved. In light of its assessment concerning the compatibility of Swedish legislation with community law, the committee has found that only a very limited range of improvements in the Swedish operators' competitiveness can reasonably be proposed.
According to Francke, who has written numerous articles in the field of (primarily international) taxation and is one of the co-translators of the OECD Model Tax Convention on Income and Capital, the regulations currently in place are not considered appropriate to the long-term task of maintaining adequate supervision of gambling in Sweden and, thus, of securing both social protection and revenue from gaming and lotteries in the future.
The committee has outlined one alternative, which is based on the view that certain types of gambling and lotteries should be subject to licensing and that such licenses should be available to all who meet the relevant legislative requirements. Due to lack of time, it has not been possible to conduct a more detailed examination of how such a licensing system might be structured.
The committee concluded that regulation of the Swedish gambling and lottery market must be maintained in the future as well; leaving the market unregulated is inconceivable.
Francke felt the need to outline an alternative model for the future regulation of the gambling and lottery market in Sweden.
Doubts about the compatibility of Swedish lottery legislation with community law have steadily grown. Further, much of the gambling that takes place in Sweden is organized by operators who are not within the reach of Swedish regulation and supervision.
In the committee's view, there is insufficient scope for strengthening the competitiveness of Swedish operators under the existing regulations without this adversely affecting both public imperatives and compatibility with community law. Thus, that existing regulations are not fully comprehensive and do not properly reflect how the market works cannot be ignored. The need for a radically different legislative model, especially with regard to electronic gaming, is becoming increasingly apparent.
Whatever the case, the lottery market must be subject to regulation. The fact that the state can nowadays only exercise control over that part of the market for which Swedish operators are responsible is, therefore, unsatisfactory. As much as possible, all actors in the Swedish market should be subject to the same regulatory system, and this system should also extend to those who organize gambling over the Internet to which Swedish players have access.
The model outlined in the report is a licensing system that would make a fairly limited number of licenses available but would allow anyone meeting the requirements to apply for a license. This means there would be nothing to stop commercial operators from applying.
The basic licensing terms and conditions would be regulated by law. Anyone not granted a license would be prohibited from organizing lotteries in Sweden. Foreign operators could be granted licenses on condition that they have some kind of contact point within the country. Activities would be subject to Swedish taxation, which means the proceeds from gaming would continue to benefit public interests and causes.
Licenses would be revocable in the event of misconduct on the part of the license holder. It would not be possible to use a license to organize games directed at other countries without reaching a special agreement to this effect. Activities not covered by the licensing system would continue to require regulation along the lines of the Lotteries Act.
A system of this kind would mean both that regulation of a major part of the actual lottery market could be maintained and that at least some of the capital that previously flowed out of the country could be kept here. The chances of a licensing system such as the above meeting the requirements of community law are probably greater than if the existing regulations were to be retained.
A higher level of competitiveness may, of course, lead to an increase in gaming and a growth in gambling addiction. It should be possible, however, to design the licensing system in such a way that these risks are avoided.
There is reason to believe that this model would increase the attractiveness to participants of games coming within the regulatory framework, and that operators choosing to remain outside would no longer be considered as attractive.
Click here to view an extensive summary of the report.
The full report is only in Swedish, and is posted online at: http://www.regeringen.se/sb/d/108.