Channelization continues to take hits in Sweden, ATG warns

Channelization in the regulated gambling market in Sweden continues to decline, the country-based bookmaker ATG has warned, sounding the alarm over a withdrawal of punters from the regulated market, and their possible leaking to offshore destinations.

In a fresh report focusing on the period between Q1 2019 and Q4 2023, the organization indicates that there has been a steady decline in the number of players who pick the regulated market, with a significant swathe of players now looking for alternative options with unlicensed operators instead.

The report seeks to both identify the issues that the industry faces, and to also help raise awareness about the problem of channelization. According to the findings published by the ATG, the actual channelization rate is right now anything between 69-82%, which is below the government-stated target of 90%.

In a translation of the original statement, ATG CEO Hasse Lord Skarplöth had this to add:

"It is a very worrying development and our investigation shows that more still needs to be done to keep the unlicensed companies away. Unlicensed gambling is the biggest threat to the Swedish gambling market and the vulnerable target group with gambling problems."

Swedish lawmakers and regulators have been growing increasingly hawkish on the industry, introducing a new supplier license regime, discussing a potential tax increase, and not least, obligating the industry to achieve higher channelization.

According to the ATG, apart from channelization rates being inconsistent with the country-set target, there are other problems as well.

For one, betting at offshore operators is often associated with a higher incidence of problem gambling, which is not addressed by the companies nor actively policed as it would be in the regulated market.

The issue is even more serious, as the legalization of the market did not stem the tide of players seeking offshore opportunities. In fact, raising awareness for gambling saw a tenfold increase in the offshore market. The licensing supplier regime seems to not have solved much, or to be on delayed implementation.

At least 19 out of 20 companies that target Swedish players without a license are said to have the same software as their regulated market counterparts. ATG even argues that such websites are using BankID to facilitate transactions for their players actively.

Part of these problems can be solved by banks being more diligent about what transactions they clear, Skarplöth argues, but he also reminds us that the tight anti-money laundering clearances required from players are another contributing factor to the increasing number of offshore players.

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