Gustaf Hoffstedt: “The government has a strong incentive to safeguard its licensing system”

BOS Secretary General Gustaff Hoffstedt sits down to comment on the current regulatory situation in Sweden, as the industry is facing new challenges, in particular with a proposed suspension of credit card use for certain gambling transactions. As channelization declines in the regulated market in the country, the licensing regime is feeling the pinch. The government should do everything in its power to protect the licensed market, Hoffstedt argues.

Q: Gustaf, thank you for agreeing to this interview. The Swedish government is now determined to move forward with a proposal to ban credit cards for the purposes of gambling. Why do you think the government has reached this decision?

There is already a ban on using credit cards for gambling in a number of European jurisdictions. In addition, the idea is enticing. Gambling on credit does not intuitively appear as a healthy way to seek entertainment.

Q: As you have noted before, the government has collated evidence to suggest that credit card use does not necessarily drive up the number of problem gamblers in the country. Why is the government acting against this evidence, do you think, at a time when we are all talking about the need for a more "evidence-based approach"?

There will always be an element of emotional political regulation, especially in sensitive industries such as gambling. An evidence-based approach is often trumped by short-term initiatives that aim to give the impression of a powerful political decision-making ability.

Q: One of the points you raise is that some regulatory decisions – increasing the gambling tax rate and banning credit cards – would empower the black market. Is BOS prepared to track and follow through to prove to the government that this is indeed the case if the measures are passed?

Yes of course. We measure the channelization in the gambling market together with several other stakeholders. We will also follow up on whether our lower or the government's higher estimates for what the tax increase will bring are closest to reality.

Q: What measures would make sense, do you think, to limit harm to players while ensuring that the regulated gambling market in Sweden remains competitive and appealing to customers?

The duty of care is the cornerstone of consumer protection. It shall be further developed as knowledge in technology and psychology expands.

Q: Does the government show any interest in input coming from BOS and other industry stakeholders in general?

The interest from the government is not yet sufficient, but as the channelization continues to decline, it is becoming obvious even to the government that hitherto untested policies should be considered.

Q: Are you optimistic about the future of Swedish gambling despite the clear challenges that have arisen?

The whole of Europe is now going through a phase of excessive restrictions from governments and gambling authorities, leading to shrinking market shares for legally regulated gambling.

Unfortunately, Sweden is no exception in this respect. It is easy to become pessimistic about this development. At the same time, in several jurisdictions, including Sweden, we are beginning to see a renewed interest from governments and authorities in what can and should be done to save the gambling license systems.

After all, those systems were decided and implemented by the same governments and gambling authorities. They have a strong incentive to protect and safeguard their own licensing systems.

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