Swedish gambling tax reform topic resurfaces. The CEO of Sweden's Horse Racing and Betting Company (ATG) proposed to follow the UK's lead in raising the tax rate for online casinos, which was immediately met with sharp criticism from the Swedish Online Gambling Trade Association (BOS). BOS Secretary General Gustav Hofstet directly criticized the proposal as "self-harm" to the national gambling market, believing that higher taxes would only push players towards the illegal market.
Controversy Origin: Following UK tax reform, triggering industry backlash
ATG CEO Hasse Rod Sharplos proposed this week that Sweden should follow the UK's latest tax reform plan, raising the tax rate for licensed online operators while exempting horse racing betting. The UK announced in the autumn budget that from April 2026, the remote gaming tax will be significantly increased from 21% to 40%. However, this "copycat" idea was met with firm opposition from BOS. Hofstet warned that raising the tax on online casinos in Sweden, which already has "one of the largest black markets in Europe," is not a precise measure but "self-harm."
Core Argument: Higher taxes may endanger the diversion rate, not helping problem gambling
The core argument of BOS's opposition is the concern about the "diversion rate." The diversion rate measures the proportion of players gambling with licensed operators, and the Swedish government's long-term goal is 90%. However, data shows that this ratio has slightly dropped from 86% in 2023 to 85% in 2024, with the latest quarterly estimate between 74% and 85%, failing to meet the target. Hofstet sharply pointed out: "Higher taxes will not reduce risks; they will only push players overseas, weaken consumer protection, and shrink the regulated ecosystem." He emphasized that the key to solving the problem of pathological gambling lies in regulation and diversion, and raising taxes is exactly contrary to this.
Moreover, BOS cited data to refute the necessity of tax increases: Although the accessibility of online gambling has greatly increased, the proportion of Swedish problem gamblers (PGSI score ≥3) has dropped from 2.2% when the market opened in 2019 to 1.3% in the fourth quarter of 2024. "For people without risks, all forms of gambling seem equally harmless," Hofstet said, "but for those with gambling problems, all types can be dangerous, with the highest proportion of problem gamblers being in the lottery sector."
Counter Proposal: BOS advocates for increased taxes on horse racing betting
In response to ATG's differentiated tax reform ideas, BOS proposed a completely opposite suggestion. Hofstet believes that if taxes really need to be increased, a more "rational" approach would be to raise the tax rate on horse racing betting and reduce the tax burden on other items. His reason is that the diversion rate for horse racing betting is as high as 98% to 99%, making it the most successful segment in the Swedish gambling market in terms of diversion, and relatively insensitive to tax rates. On the other hand, the diversion rate for online casinos and other sectors urgently needs to be improved, and higher taxes will only widen the price gap between licensed and unlicensed operators, further lowering the diversion rate.
This debate is not the first time BOS has "sung against the tune" with giants like ATG. Just last month, BOS also criticized the proposal by ATG and state-owned Svenska Spel to completely ban online gambling bonuses, considering it a form of market protectionism that would drive players to unregulated, unlicensed sites. How tax policies in various countries affect the market remains a focus of the industry, and more in-depth analysis can be followed on the PASA official website for related insights.
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