Sweden is preparing to change how it enforces rules against unlicensed online gambling, with a new legal test due to take effect on January 1, 2027. The reform would shift enforcement from whether an operator targets Sweden to whether Swedish residents are using the service, giving authorities broader reach over offshore sites. Industry stakeholders support the change but warn it will not succeed unless the licensed market remains competitive.
Sweden Tightens Gambling Rules Amid Warnings of Declining Channelisation: Key Insights
- Sweden plans to amend its Gambling Act from January 1, 2027, by shifting enforcement from whether operators target Swedish consumers to where players are located. It gives authorities stronger tools against unlicensed offshore gambling sites used by Swedish residents.
- The Swedish Trade Association for Online Gambling (BOS) supports the reform but warns that enforcement alone will not fix falling channelisation. Industry leaders argue that consumer protection fails if players continue to migrate to unlicensed gambling platforms.
- Analysts have also raised concerns about higher gambling taxes, advertising restrictions, and slow product approvals. They explain that without a competitive licensed market, tougher enforcement may reduce protection rather than strengthen it.
A Shift in Enforcement Strategy Amid Channelisation Concerns
The planned reform would replace the current “direction criterion” with a broader “participation criterion” focused on player location. This change would make it easier to act against offshore operators that avoid Swedish language and currency while serving local players.
The Swedish Trade Association for Online Gambling (BOS) supports the proposal but argues it cannot work in isolation. Gustaf Hoffstedt, the chief executive of BOS, has warned that Sweden is falling short of its channelisation target, with a significant share of gambling expenses moving to unlicensed sites.
Hoffstedt has said this leakage undermines consumer protection because safeguards only apply within the licensed market. The government believes that the 2027 reform will strengthen enforcement against operators that currently avoid scrutiny. Lawmakers had previously introduced measures to plug legal loopholes that gambling operators had been using to skirt the law.
Hoffstedt has repeatedly described channelisation as the central challenge facing Sweden’s gambling policy. He emphasised that Sweden’s framework has made licensing voluntary rather than binding.
He explained:
Channelisation is the mother of all other challenges. Without doubt, that is the most important challenge in Sweden and elsewhere. The current framework has made it more or less voluntary for operators to have, or not have, a national licence.
Hoffstedt added that the current legislation does little to restrict operators from accepting Swedish players, leading to a spurt in offshore online gambling activity. Sweden has a flourishing remote gaming sector, with revenue reaching €638 million in Q2 2025.
Hoffstedt continued:
It is not illegal to accept customers from Sweden, as long as you avoid using the Swedish language and the Swedish currency, the krona. The result has been catastrophic when it comes to safeguarding the licensed gambling market.
Hoffstedt believes the new participation-based approach could change incentives, but only if it is enforced.
He observed:
Enforcement is key here. It really doesn’t matter if we have a law that the prosecutor is not really interested in.
Enforcement Limits and the “Illusion of Control”
Hoffstedt has questioned whether tougher enforcement alone can change player behaviour. He argued that digital barriers rarely work because players will always find a way to bypass the law if they feel that offshore gambling operators offer better gaming experiences.
Hoffstedt noted:
We live in mature democracies. Do we really want the government to limit our access to the internet? The consumer will always find ways to circumvent restrictive measures if they believe the gambling market is more attractive elsewhere.
He further noted that Sweden relies too heavily on repressive measures, such as payment, DNS and ISP blocks. The recent participation criterion adds to that list. He acknowledged that the underlying logic is to create a wall between the licensed and the unlicensed market. However, he cautioned that “if the jurisdiction fails in creating an attractive gambling market on the licence side, then that wall will not hold.”
Hoffstedt observed that leakage is already severe, and unlicensed operators occupy 30% of Sweden’s gambling market. He added that other European regulators report similar or even higher illegal shares. Czechia is a prime example of Hoffstedt’s concerns, with unregulated gambling generating CZK 14.5 billion GGR in 2025.
Loopholes in Tax, Advertisement, and Products Leave Unresolved Questions
The debate over market competitiveness intensified since Sweden increased gambling taxes from 18% to 22% in 2024. Hoffstedt has warned that higher costs can widen the gap between licensed and unlicensed offers, while adding that tax alone is not decisive.
He compared Sweden’s situation with that in Denmark, claiming that a stark difference in channelisation between the two neighbours is the distinguishing factor that allows Denmark to impose higher tax brackets. Denmark’s licensed online gambling market has expanded rapidly in recent years, with GGR increasing 14% year-over-year (YoY) in 2025.
Hoffstedt noted:
Advertising is perhaps the number one tool for licensed operators to attract consumers to the licensed gambling market. Without it, it becomes very difficult for consumers to choose a licensed operator.
Beyond tax and advertising, Hoffstedt criticised delays in clarifying product rules. He emphasised that this delay is pushing consumers over to the unregulated market.
We don’t know whether crash games are prohibited or not on the Swedish gambling market; it’s a grey zone. The unlicensed market has been offering crash games since day one, while licensed operators still don’t. If there is demand and that demand is not met in the legal market, consumers will obviously turn to the illegal market.
He called on Sweden to act quickly and include new gambling elements that are in demand. On the subject of EU-wide reforms, Hoffstedt observed that harmonisation is the Holy Grail for the gambling market. However, concrete action is still some time away. For now, Sweden must resolve its own balance between enforcement and attractiveness.
Sweden’s 2027 reform signals a clear intent to expand jurisdiction and strengthen action against offshore operators. Industry voices agree that the change is necessary but argue it will fail if the licensed market continues to lose appeal. As Hoffstedt put it, “consumer protection is completely worthless if the consumers are not present.”