Swedish regulator claims channelisation rate sits at 86% in new report

The Swedish Gambling Authority (SGA) has claimed the channelisation rate in the Scandinavian market sits at 86%, meaning the regulator’s refreshed methodology stands in stark contrast to existing estimates.

The regulator was commissioned by the Swedish government to explore the channelisation rate in the country, and has pegged the level at an average of 86%, as of 2023.

However, the rate does vary between 78% and 91% between January 2023 and June 2024, based on the various sources used to formulate the estimation.

The SGA noted that prior to the re-regulation of the Swedish market in 2019, channelisation stood at less than 50%.

However, the latest figures are wide-ranging compared to existing data in the market.

Research from horseracing operator ATG put online casino channelisation between 57% and 72%, while sports betting sat between 77% and 87%.

A survey carried out by trade body BOS between February and March 2023 suggested channelisation for the total market was sitting at 77%, with that figure falling to 72% for online casino and poker.

When the market was re-regulated in 2019, a channelisation rate target of 90% was set by the government.

Concerns have been raised that the four-percentage-point increase in GGR tax for operators from 18% to 22% will drive more consumers to the black market, further hampering the channelisation rate.

Looking at the SGA’s new report, the regulator used a four-point approach to reach the fresh 86% rate.

Those four points were: a player survey, internet traffic tracking, an estimated turnover related to internet traffic, and data from H2 Gambling Capital.

SGA director general, Camilla Rosenberg, said: “The results show that the degree of channelling varies depending on the method and form of play. The SGA believes there are four different indicators that together can give a picture of the degree of channelisation.”

In confirming the 86% figure, the SGA also released a 33-page report detailing its refreshed methodology.

In terms of the player survey, the SGA was able to ascertain a channelisation rate of 83%, which involved 1,511 respondents.

Looking at internet traffic, the regulator said it used a variety of SEO tools which put the channelisation level at 84%.

Extrapolating that data to estimate turnover in the black market, the SGA noted the legal market accounted for SEK17.3bn (£1.3bn) in 2023 versus SEK2.5bn for offshore sites.

This would put the channelisation rate at 87% based on this method.

Despite this, the regulator highlighted that turnover per user could be as much as two times higher than regulated sites due to a lack of responsible gambling measures, putting black market turnover at SEK5bn.

Data solely derived from H2 Gambling Capital suggested the level was as high as 91%.

The SGA noted that by averaging out the four indicators, an 86% rate, was the most appropriate conclusion to draw.

The regulator said: “There is no universally accepted definition of the concept of degree of channelisation.

“The degree of channelisation is calculated in this report as the proportion of Swedes’ gambling on the competitive part of the gambling market that takes place within the licensing system. In order to estimate the degree of channelling, several methods have been used.

“The results show that the degree of channelisation varies depending on the method and form of play, where betting generally has a higher degree of channelisation than online casinos.”