Gustaf Hoffstedt, Secretary General of the Swedish Trade Association for Online Gambling (BOS), speaks to SBC on the early challenges and criticisms that a re-regulated Swedish market place has faced.
SBC: Gustaf, thanks for this interview. Leading BOS, can you detail your impressions on Sweden’s first quarter as a re-regulated online gambling marketplace?
Gustaf Hoffstedt: The re-regulation has been a success when it comes to the number of license holders. However, we haven’t seen any official ‘channelization’ figures, yet I believe it is fair to say that the online gambling channelization has improved dramatically. One shall remember that Sweden used to have as low channelization as Norway, i.e. below 50 per cent.
The improved channelization has made truly functioning measures against problem gambling possible, such as a national self-exclusion system. More than 30,000 Swedes have already registered and consequently, do not receive any direct marketing and are not let into online gambling operators.
It is a fact though that profitability in a short perspective has dropped, among other things due to the self-exclusion system. In the long run that is a positive reason, because it makes it possible for the operators to focus on long-standing business relations with healthy punters.
SBC: Acting as a representative trade body, what operator concerns have been relayed back to BOS?
GH: The stability of the system from a political point of view. We have a trigger-happy government and it is only too tempting for it to impose new and harsher restrictions on online gambling, despite the fact that the licensing system is less than six months old.
SBC: The industry has faced public and political criticism over ‘aggressive advertising practices’; is this a concern for BOS? And what can be done to minimise public concerns?
GH: The industry must lower the marketing volume. There is a general marketing fatigue among people and in particular regarding gambling. Six out of Sweden’s twenty largest marketing buyers are gambling operators.
We must also lower the tonality in our marketing messages. If we are able to find more creative messages, we don’t have to scream all the time. And lastly, the whole industry must follow our marketing guidelines, whether they are a member of the association or not.
SBC: Over 120 licenses have been approved by regulator Spelinspektionen; does this figure point to over saturation of a new marketplace?
GH: There will always be room for small and innovative challengers. All successful companies are small in the beginning. Having that said, I haven’t heard anyone not believe in consolidation in the coming years. The gambling tax and compliance is expensive. These costs create a threshold and will ultimately leave fewer operators out there at the end of the day.
SBC: In addition, sixteen licenses have faced reviews by Spelinspektionen; why have operators found Swedish regulatory demands as tough undertaking?
GH: Because the regulation is based on a framework legislation, meaning that the legislator only gives a broad interpretation about what it wants to achieve. Any detailed interpretation from the regulator is always done in hindsight. In a highly competitive and recently re-regulated market it comes as no surprise that a few operators are testing the limits. That’s how practice and precedent are built.
SBC: Finally, moving forward what should all industry stakeholders be prioritising for the Swedish market – sustainability, responsible gambling, advertising practices?
GH: All the dynamics you point to, are obvious and mandatory in a matured market that takes responsibility for its products and services. Apart from that the privately-owned industry has to work together to meet the challenge of unfair competition.
As in many countries, the government of Sweden is not just the referee in the game. It is also a commercial operator. It’s never a good idea to be a referee and player simultaneously in the same game. We must as industry stakeholders convince the state to focus on its unique role as rule-maker and consequently not to itself operate as one of the market’s more aggressive operators.
Gustaf Hoffstedt – Secretary General – BOS