Sweden: Gambling Authority considers deposit limit to be unworkable

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Sweden: Gambling Authority considers deposit limit to be unworkable

The Swedish gaming authority Spelinspektiven considers a deposit limit that applies not only to every provider but to all providers to be unworkable. There is currently a monthly deposit limit of SEK 5,000 in Swedish online casinos. That is an amount of a little less than 500 euros. But the Swedish gambling authority has no way of preventing deposits from multiple providers. In Sweden, a deposit limit of 5,000 SEK has been in effect in online casinos and online bookmakers for a few months. However, the question that many experts ask themselves right from the start is: How can you prevent gambling fans from making deposits with different providers in order to evade the limit? The Swedish gaming authority Spelinspektiven has now given the answer: There is no practicable way of preventing deposits from different providers.

Low deposit limit in Sweden ineffective?

The deposit limit only applies to each provider individually. That is why it is only possible to control the providers individually. The Swedish Commission for Equal Opportunities (Jämlikhetskommissions) has therefore proposed to create a central register in which all payments made to all licensed gambling providers in Sweden are recorded. This should prevent Swedish gambling fans from leveraging the deposit limit by making deposits with different providers. But the Swedish gaming authority Spelinspektiven is very critical of this proposal. There are some strong arguments against a central register. The deposit limit of 5,000 SEK was only decided this year in response to the health crisis. But there are many indications that Sweden is trying to maintain this deposit limit permanently. But without a central database in which all deposits are registered, such a deposit limit would be ineffective and possibly even legally problematic.

From the point of view of the experts at the gaming authority Spelinspektiven, a central register would be legally difficult to enforce. In essence, it would be a real-time monitoring of all customers of online casinos and online bookmakers. It is highly doubtful whether this can even be reconciled with Swedish law. But even if Swedish law didn’t cause problems, there would likely end up being problems with European law. Why should a normal gambling fan who wants to play in an online casino from time to time accept that the state monitors all activities? That doesn’t seem proportionate. But when it comes to monitoring gambling, it doesn’t just seem in Sweden that there are no limits. It is interesting that apparently nobody in the government noticed that a deposit limit that only applies to each provider individually has to remain ineffective in the end. The fact that the Swedish gaming authority first has to point out this problem shows that perhaps not the best professionals are on the side of the legislator. In Sweden, gambling regulations have been tightened significantly this year. The first providers have therefore left the Swedish market and other companies are considering whether it is worthwhile to stay in Sweden permanently under the current conditions. A central register could ultimately lead to the failure of the entire Swedish gambling regulation. As long as there are online casinos and online bookmakers outside the Swedish regulation, Swedish gambling fans always have attractive alternatives available that are not subject to government surveillance. An alternative could be voluntary self-restraint. There is already a blacklist in Sweden that every citizen can use. This blacklist could also be used to voluntarily implement a general deposit limit.

Fight against unlicensed providers difficult

In Sweden, the gaming authority is fighting on two fronts. On the one hand, very strict gaming regulation is to be implemented. On the other hand, the gaming authority should also take action against providers who do not have a license. More and more Swedish gambling fans are currently looking for alternatives in the unregulated market. However, it must be noted that the supposedly unregulated market also has many serious and attractive providers. The key point is that these providers don’t have a Swedish license. It is therefore understandable that Sweden would like to exclude these providers from the market. But it doesn’t work as easily as many Swedish politicians imagine. In a current report, the Swedish gaming authority documents very impressively how difficult it is to take effective action against providers who offer sports betting and games of chance in Sweden without a license. The detour via payment providers does not work either, as many payment providers are unwilling to share sensitive customer data with the Swedish gaming authority. It is somewhat absurd that in Europe gambling should be treated exclusively nationally. Most other industries can easily work across borders. But should there be national rules for gambling, which can then be combated with drastic methods such as internet bans and central registers for deposit limits? The issue of proportionality is likely to be discussed at the latest when Sweden takes legal action against gambling and payment service providers.

The basic problem with any national gambling regulation is that it is extremely difficult to keep the unlicensed providers out. All countries in Europe experience this, also because EU law has an overarching law that makes many restrictive measures impossible from the outset. It would also make sense to discuss whether it could be a good idea at all to regulate gambling on the Internet nationally. If not every EU country is to have something like a Chinese firewall, it would be advisable to find a pan-European solution for regulating gambling. This would make it much easier to implement this regulation in practice. But in practice this fails due to the very different ideas of the EU countries when it comes to gambling regulation. In Germany, not even the federal states can agree on sensible rules for online gambling. How is it then to be possible to find a common line with other countries such as Sweden, Spain, Denmark and France? In Sweden, however, it is also clear that national regulation is reaching its limits. One can still get the impression that not only in Sweden do many politicians want to regulate online gambling in the same way as offline gambling. Unfortunately, some politicians do not realize that completely different rules apply on the Internet because the medium functions completely differently. A pragmatic approach could also lead to success in the context of national gaming regulation. But neither in Sweden nor in Germany is it currently foreseeable that online gambling will be pragmatically regulated in any way. The discussion about the general deposit limit in Sweden documents this very well. This discussion will also take place in Germany soon, because Germany is planning a similar regulation.

Central register soon also in Germany?

Will every gambling fan soon have to be prepared for the fact that all deposits are registered in a central database? The new State Treaty on Gambling provides exactly that. The monthly deposit limit should be 1,000 euros, which is a little higher than in Sweden. However, this regulation should apply to all providers from the start. What does that mean? In Germany, the gaming authority that has yet to be created is to keep a central register in which all deposits are registered in real time. On this basis, gambling fans should be prevented from losing more than 1,000 euros a month. Exceptions to this regulation are currently being discussed, at least for a small number of customers. That would make the real-time database a bit more complicated. A look at IT projects in Germany shows that everything is probably going very well and will work without any problems from the start. And the data will probably not be misused either, because that would never happen in Germany. It is not the case that authorities suddenly come up with the idea that data that is collected by restaurants for hygiene reasons is suddenly used to fight crime. But irony aside: It is perfectly clear that a central register is legally difficult to enforce. Above all, it would be difficult to justify why, for a very small percentage of players who get into trouble at some point, all players should be tracked in real time. If it were so easy to do, one could also generally introduce data retention and always save all data of all citizens.

It is noteworthy that when it comes to gambling, the surveillance fantasies of the politicians in charge know no bounds. It’s actually about a very simple matter: The gaming authority in Sweden and soon also in Germany has the main task of ensuring the reliability of the providers. In addition, sensible player protection should ensure that problem players do not endanger themselves. Both would be possible without creating a huge surveillance apparatus. An individual assessment of the players and the behavioral patterns would be much more useful in order to specifically find customers in online casinos and online bookmakers who are endangering themselves. This could be done fully automatically directly at the providers. A general deposit limit, on the other hand, is particularly suitable to make the licensed casinos less attractive for high rollers. But the high rollers in particular, who have a lot of money at their disposal, are on the one hand important for the casinos, and on the other hand they may also tend to be a bit more at risk of developing a problem. There are many sensible approaches to regulating online gambling. But in Sweden and Germany, gambling regulation is currently developing in a problematic direction. If the only problem was that the regulation could end up being too strict, it might still be bearable. The problem is, however, that in the end, player protection can suffer considerably. This would achieve exactly the opposite of what the numerous opponents of gambling in Sweden and Germany want.


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