BOS: Sweden's tax rise will create more than 1,000 problem gamblers
Trade body believes proposed tax increase would impact on channelisation and lead to soaring treatment costs as customers flock to the black market
The Swedish Trade Association for Online Gambling (BOS) has calculated that the proposed four percentage point GGR tax hike in the market could potentially create just over 1,000 new problem gamblers.
The Nordic nation’s government is aiming to increase Swedish gambling tax from 18% to 22%, with the hopes of increasing tax revenues by as much as SEK539m (£39.8m) per year from 2025.
One standout feature of BOS’ report, produced by Copenhagen Economics (CE), is that the organisation predicts the tax revenue increase to be significantly lower, around the SEK214m to SEK399m mark, a prediction that goes hand-in-hand with the estimated reduction in channelisation by 1.2 to 2.25 percentage points.
The report suggests that the tax impact of customers switching to unlicensed operators and extra costs needed to fund problem gambling support will reduce the planned tax bounty.
However, the most notable claim from BOS comes in regard to its fears surrounding a rise in problem gambling.
The group predicts the tax hike will increase in the amount of players switching to the unlicensed market, where research by the Public Health Agency of Sweden suggests 30% of players report gambling problems as opposed to just 2% in the licensed market.
The report stated: “Based on the assumed prevalence rates, our approach estimates the increase in problem gambling attributed to the anticipated increase in the prevalence rate among individuals transitioning to the unlicensed gambling market. We estimate that between 591 and 1,247 individuals will develop gambling issues following the tax increase.”
In turn, that rise in the number of problem gamblers is estimated to have a knock-on impact and will inspire a net decrease in tax revenue worth somewhere between SEK19m and SEK41m, given the yearly cost of problem gambling per individual is believed to be SEK32,733.
The effect of the proposed four percentage point tax rise is estimated to be a cost increase between 0.17% and 0.36% in terms of the annual cost for problem gambling in Sweden.
When it comes to just how many gamblers will switch to unlicensed operators, CE estimates that between 2,881 to 6,085 individuals will be motivated to enter the black market as a direct result of the tax hike.
Gustaf Hoffstedt, BOS secretary general, stressed it would be wiser for Sweden’s government to focus on bolstering the regulated market to protect consumers.
“At the price of a modest net addition to the treasury, the tax increase creates around one thousand new cases of people with gambling problems,” Hoffstedt explained.
“Thus, gambling problems that would never have occurred without the increase in the gambling tax. The government should completely overhaul its gambling policy and instead protect and strengthen the legal gambling market, which offers the consumer the protection all gamblers should be able to enjoy.”
Last month, ATG CEO Hasse Lord Skarplöth suggested the Swedish government is open to amending the tax rise, following a seminar that was attended by Minister for Financial Markets and member of the Moderate Party Niklas Wykman.
Skarplöth is of the belief that differentiated rates should be in place for sports and horseracing operators compared to online casinos.
On his exchange with Wykman, Skarplöth said: “He has insight into all of this and says he ‘doesn’t close any doors’ to ATG’s proposal for a differentiated tax. The minister used the word ‘predation’ several times and I can only nod in agreement.”