Roundtable: Winlandia and Glitnor Group on challenges and trends in the Nordics

With Sweden set to increase its GGR tax rate to 22%, Norway promising to clamp down on unlicensed operators, Finland vowing to ditch its monopoly model by 2026 and Denmark being championed as a core market by some of the industry’s big players, the Nordics still have a story to tell in a world where attention has shifted elsewhere.

While the US may be more exciting, there is a feeling Europe is starting to click back into gear given a number of exits from the States. And, while the continent faces its own challenges, there remains optimism that there is still something to shout about in this gambling heartland.

Here, Winlandia co-founder Christoffer Grönlund and Glitnor Group brand and business development head David Schwieler outline where they believe the key areas for growth are and what lies ahead for the Nordics.

EGR: Why do you think operators and suppliers are turning their attention towards the Nordics?

Christoffer Grönlund (CG): There are many factors as to why operators may have a thirst for the Nordics. The Nordic economies are quite robust, not to mention the fact that both digital innovation and internet penetration are incredibly strong across the region. 

On the whole, the population within the different Nordic countries are also quite tech-savvy, which makes the region primed for the expansion of igaming.

Regulations have also been an important factor as they provide operators with a framework on how to market their products to the local population. For markets that have still not been regulated, the interest is of course high due to potential profit margins, but that is only possible if you know how to navigate these markets.

David Schwieler (DS): I think there’s an important distinction that needs to be made here and that’s that it’s not so much an increase in the number of operators that are entering Sweden but rather the number of sites that are being run by those operators. The reason for this is that it’s an incredibly difficult market in which to grow your business by more than 10% per annum, so companies are diversifying their offering by providing new brands instead. This way, it’s much cheaper for them to acquire customers with an empty database than it is to continue growing their existing site.  

In terms of Sweden’s appeal, I’d say it benefits from being a mature market where the regulation is very clear. The average player value is quite high and the Pay and Play system it has place where operators offer their whole package up front in one go makes it very profitable compared to other markets where bonus costs are always ongoing. In light of this, it makes sense that operators are choosing to cash in by launching new brands rather than developing their current sites.  

EGR: Are there any markets within the Nordics that you believe are well positioned for growth over the next few years?

CG: Sweden has stood out since it became a regulated market back in January 2019, which gave operators a structured environment. With the upcoming potential tax increase however, we need to look in the crystal ball to determine how this will affect the market’s growth and ongoing channelisation.

The regulated Danish market also holds a lot of potential, with the country’s online gambling market continuing to grow year on year. Both markets have demonstrated growth and stability, making them attractive for future expansion.

DS: Looking at the various countries in the region one by one, it was recently announced that Norway will criminalise and close down all foreign igaming operators in the country, so I would think that would be a bit of a no-go. Denmark, meanwhile, has a prohibitive tax rate in place that makes it tricky to run an online casino brand profitably, so I also don’t see it being on the map any time soon unless things change. Sweden will continue to grow, but that growth will primarily be driven by operators launching additional brands to attract new customers.

That leaves Finland, which is undoubtedly the Nordic market that is best positioned for growth over the next few years. The country is set to pass proper online gambling regulation in 2026 and, when this happens, I can see it being quite similar to Sweden. The size of the market will be a little bit smaller overall and the player value might be a little less but, with the Pay and Play system in place, it will still be very profitable for operators that do the right thing because they won’t have to worry about costing and automating their bonuses over the longer term.  

EGR: What are the biggest challenges that face those looking to enter the Nordics?

CG: As with any region, the Nordics is not only gold and diamonds, the region also presents several different challenges as well.

The first challenge relates to regulations. The Nordics has very strict regulations for both operators and suppliers to adhere to. There is also an incredibly strong focus on responsible gambling. This is something that every operator needs to understand and address before considering expanding.

The second challenge is market saturation. The competition is fierce, and there are many well-established local and international brands operating here. You need to find ways to be able to stand out from the crowd and engage with bettors. Cultural and language barriers can also be tricky to navigate; understanding the local market and being able to provide both a localised and personalised service is a must.

To effectively overcome these challenges, operators and suppliers firstly need to invest in both market and legal research to understand how best to navigate the ever-changing market and regulatory conditions. Brands need to have a clear strategy.

If more brands come and go as they fail to penetrate the Nordic markets, this will only add to the market saturation. This happens repeatedly. My advice for brands is to focus on the markets where they are most confident.

DS: Regardless of the market, my message has always been it’s not good enough to just be good enough. First of all, you need to have a state-of-the-art product that features strong onboarding and a wide selection of games. Then you need to think about the Pay and Play factor and provide a great package that has that initial appeal for customers. When you have all those things in place, you should start to think about how you can position yourself so that you add something from a branding perspective – and to do that effectively, you need local knowledge.

If you don’t have that footprint, you’re not going to make it, and that would be a shame because you’d potentially be missing out on a pretty lucrative market. While it’s since been eclipsed by some of the US states, Sweden is still the 12th or 13th biggest regulated market in the world.

EGR: Can you outline some key player trends that differ between each market in the Nordics?

DS: I know I keep repeating myself, but the fact Sweden uses the Pay and Play model really does make it quite different from other markets. It’s easy to onboard, easy to deposit and easy to withdraw and, because you’re giving customers a single lifetime bonus offering, you can’t really keep them at the table with the same retention strategies you’d use elsewhere. As such, it becomes more about the product; that is to say, having the games, having the customer support and making it as easy as possible for players to start their session without any added bells and whistles. It’s no trade secret that in order to be successful in Sweden you just need to simplify, simplify, simplify. 

Another big difference in the Swedish market operators should be aware of is customer loyalty – or the lack thereof. Because of the way bonuses work over there and the weekly deposit limits that were introduced during the pandemic, it’s not uncommon for a regular Swedish customer to have accounts at six, eight or even 10 online casinos. The challenge then becomes working out how to retain your customer base without being able to incentivise them through bonusing, and one of the best ways to do that is to speed up the process and ensure the player can get to their favourite games even faster.

EGR: What emerging technologies or trends do you foresee shaping the future landscape of the Nordics specifically?

CG: Virtual reality (VR) will offer an amazing gaming experience and will attract the tech-savvy Nordic audience. AI will help operators to deliver more personalised gaming experiences as well as improving customer service.

Blockchain and crypto will appeal to a segment of players that request a higher degree of privacy, while also offering security in transactions.  Another big cornerstone is, of course, the upcoming regulation of the Finnish market, which is planned for 2026.

Norway is also moving in the same direction towards embracing a regulated gambling framework, but nothing is set in stone just yet. One thing is for certain, that there certainly is a mix of both opportunities and challenges across the Nordics.

DS: As I touched on previously, at this precise moment in time, the best way to be successful in Sweden is to keep things simple. The Nordics are regulated and, for the most part, it’s pretty generic; so when you start to focus too much on innovation for innovation’s sake, you lose business.

Sure, you need to be innovative when it comes to things like onboarding but, the moment you over-complicate things with tons of added features and functions, you’re ultimately just increasing the time between the player logging in and them being able to play your games. 

To take an example from other industries, we’re currently in a swipe environment where customers can intuitively flip through content and choose what they want to play, watch or listen to. In Sweden, I don’t think the swipe approach works particularly well because then you’re spending more time looking for things and less time interacting. That said, we can still learn from other industries when it comes to meeting customers’ needs and, if a more streamlined method of content delivery emerges that puts the game directly in front of the players, I’m sure it would be very successful.