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Consolidation to Wash Over Sweden’s Gambling Market, Svenska Spel CEO Says

Svenska Spel’s CEO believes Sweden’s gambling market is not big enough for 70 licensed operators, expects wave of consolidation

A wave of consolidation will wash over the Swedish online gambling sector as the local market is adjusting to the new regulatory environment, the CEO of state-owned gambling operator Svenska Spel told Bloomberg.

Patrik Hofbauer took over the CEO role at the company last December, joining from a Chief Executive position at the Swedish branch of Norwegian telecom Telenor.

The executive told Bloomberg earlier this month that he believes only 5 to 10 licensed online gambling companies will prevail in the newly regulated Swedish gambling space. The local gambling regulator, Spelinspektionen, has so far issued nearly 70 licenses for the provision of gambling services under the country’s new law. However, according to Mr. Hofbauer, the Swedish market is not big enough for all those new entries to thrive.

Svenska Spel’s top official further elaborated that a wave of merger and acquisition deals should be expected as operators are adjusting to the new regulatory conditions.

Sweden’s new gambling law took effect on January 1, 2019. The new rules opened the local regulated market to international operators as long as they have obtained a license from Spelinspektionen. The Nordic nation was previously an attractive destination for unregulated operations, with internationally licensed operators targeting local gamblers with tempting offers and spending heavy budgets on aggressive marketing.

Times Are Changing

While Svenska Spel has remained holder of the largest market share in Sweden, the unregulated market has exploded over the past several years, hitting heavily the state-owned entity’s profitability.

Up until this year, Svenska Spel was the exclusive regulated provider of multiple gambling services. Following the liberalization of the local market, the company is now seeking to make its offering more attractive to local gamblers and is focusing more on its digital arm. It is competing with the likes of Kindred Group, Betsson, LeoVegas, and a number of other internationally recognized brands.

Svenska Spel currently offers about 200 online casino games and plans to further extend its online gaming footprint. However, international operators have complained that the state-owned entity will use its land-based casino operations to market its digital business to its existing customer base.

Mr. Hofbauer told Bloomberg that he is confident Svenska Spel’s marketing activity is acceptable under the country’s new regulations.

The overly aggressive advertising of gambling services has become an important topic over the weeks after the re-regulation of the local market. The nation’s Minister for Public Administration held a meeting earlier this month with executives from the locally licensed operators to discuss the issue. There have also been suggestions for limits on how gaming and betting products are advertised to be introduced.

Mr. Hofbauer said that the heavy spending on different forms of marketing would likely subside after the first half of the year partially due to the 18% tax on revenue licensees are required to contribute in exchange for the right to operate in the field.

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The post Consolidation to Wash Over Sweden’s Gambling Market, Svenska Spel CEO Says appeared first on Casino News Daily.

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