Traditional gambling advertising spend declines in Sweden

By Robert Fletcher

Gambling operators’ spend on traditional advertising in Sweden declined to its lowest level in seven years during 2022.

Operators spent a total of SEK3.40bn (£244.6m/€286.3m/$311.1m) in the past year, a 15.0% drop from SEK4.00bn in the previous year.

The figures, posted by regulator Spelinspektionen, also showed this was the lowest spend since data was first published in 2016. The 2022 total was also a far cry from the high of SEK7.30m posted in 2018.

Sweden experienced two consecutive years of decline in 2019 and 2020, where spend hit SEK5.70bn and SEK3.70bn, respectively. Spending then increased slightly in 2021 before dropping again last year.

“Traditional” advertising

Spelinspektionen noted that the data showed gross advertising investments, which meant discounts were not included. The figures also only applied to “traditional” media, classed as print, television, radio and outdoor advertising. This also included some digital assets.

However, the data does not apply to advertising in digital media such as social networks, keyword advertising and online video.

Breaking down advertising spend in 2022, the majority of this – 30% – focused on casino, with much of this being for online casino. Sports betting, excluding horses, followed close behind with a 28% share of advertising spend during the year.

Some 26% of spend was committed to lottery-based games, with 12% for betting on horse and 4% bingo, mainly online.

Market regulation

The near-steady decline in traditional advertising spend since 2018 followed the relaunch of the Swedish regulated market. The new-look market went live on 1 January 2019, with many brands that were not licensed exiting the country at that time.

Following mass withdrawal from Sweden, coupled with Spelinspektionen’s crackdown on unlicensed activity, advertising spend was reduced. This trend continued for the next two years as attention turned to regulated activities.

However, the decline in traditional advertising spend may also be partly explained by the switch to digital marketing. With more operators using digital platforms such as social media to connect with consumers, they spend less on traditional media advertising.

Digital advertising is often cheaper than traditional platforms and allows brands to target set groups of consumers. It also allows operators to post direct links to their websites and platforms so players can quickly access gambling services.

Concerns over channelisation

While the regulation of gambling in Sweden certainly helped to tackle unlicensed gambling, and indeed marketing of this, concerns remain over channelisation in the country.

Last month, a report by Sweden's Online Gaming Industry Association (BOS) revealed 77% of Sweden's online gaming market is channelised. This, the BOS said, was “critically low” and called for action to be taken.

Sweden’s channelisation goal – the percentage of licensed gaming offerings that it wishes to have on the market – is currently set at 90%.

Gustaf Hoffstedt, secretary-general at BOS, emphasised the seriousness of the low channelisation rate.

“There is no doubt that the Swedish licensing system is in a serious situation,” he said. “Far too much power has been spent on the part of the state to force the licensed gambling companies to implement measures that have not been well received by gambling consumers.”

Wider range of powers for Spelinspektionen

Shortly before the report was published, Sweden’s government issued Spelinspektionen a range of new measures to help combat illegal gambling.

The changes primarily related to payment providers and Spelinspektionen’s regulatory powers in this area.

Payment providers are now required to submit certain information to Spelinspektionen. This includes details on whether their systems are being used to process payments to and from unlicensed operators in Sweden.

Earlier this month, Spelinspektionen began to obligate owners of supplier licences to pay fees. Effective from 1 July, Spelinspektionen charges a fixed fee to the organisation that holds a licence to supply gaming software to operators in Sweden.

The regulator requires businesses to pay a separate fee for each licence it holds unless it receives a specific exemption.

Also last month, it was announced that Swedish lawmakers will consider a proposal to increase penalty fees for gambling operators that breach the country’s Money Laundering Act.

The proposal would adjust penalties to the same maximum amount for violations of the Gambling Act.

At present, the maximum operators can be fined for breaching the Money Laundering Act is much lower than for Gambling Act violations. The memorandum said this is “unsatisfactory” as, in many cases, violations of the Money Laundering Act can be considered more serious than those related to the Gambling Act.

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