iGB Market Monitor: December 2020

When Sweden announced it was regulating the market starting from January 2019, it was clear to the big operators that moving into the white market would be less profitable than remaining outside of it.

But many assumed there would be a trade-off in terms of legitimacy and that ultimately it was the only choice in an environment where the government had made clear a high channelisation rate was a key priority.

However, even before Covid-19 struck, there were signs the market wasn’t working as it should and the knee-jerk political reaction to the pandemic has made things worse.

Given the addition of deposit limits and the misguided idea of a central state-run portal to enforce these, it’s unsurprising that all evidence points to a growing shift of players from the regulated market to the unregulated market.

The end result is that smaller operators are increasingly choosing to target Swedish players without gaining a licence, while bigger operators are questioning whether they’ve made the right choice in opting for the licensed regime.

Analysts suggest this could lead to a sizeable shift away from the regulated market in the next five years, which if true, would represent a massive failure for Sweden’s licensing system.

Further south in Europe, similar debates are taking place in Portugal, where the latest data suggests more and more players are also moving outside the licensed system. Here, as with Sweden, politicians seem intent on using assumptions about a rise in igaming due to the pandemic to justify further clampdowns on operators, despite contradictory evidence.

There is more optimistic news from Denmark, however, where an analysis of the data from the beginning of the regulated market in 2012 until last year clearly demonstrates that the addition of online can add to a market’s overall size rather than simply shifting play between channels.

Stephen Carter Editorial director, iGB

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