The Swedish government is implementing a credit card ban, and operators are not happy. [Image: Shutterstock.com]

A new pressure point

Gambling operators often get a hard time. While they might provide fun to countless people across the globe, it is the negative side of their business that makes the headlines. Problem gambling is a hot topic in most regulated markets, and operators typically find themselves swimming against the tide of media criticism and tightening regulations.

Operators have locked horns with the Swedish Gambling Authority and government over a range of issues

Sweden is certainly no exception. The country reregulated its gambling market through the Swedish Gambling Act in January 2019. To say the resulting journey has been a turbulent one would be an understatement. Operators have locked horns with the Swedish Gambling Authority and government over a range of issues, from unclear rules to increasing tax.

The latest argument revolves around a controversial issue – credit card gambling. This week, the Swedish Trade Association for Online Gambling (BOS) has taken aim at the Ministry of Finance’s decision to ban gambling with credit. It’s a measure that will come into place in September of this year, and BOS argues it is not based on evidence.

The BOS argument

BOS previously supported tightened credit card regulations in Sweden in an effort to combat indebtedness and reinforce customer protections. However, the trade body changed that stance following a report into the issue last year. Conducted by the government itself, this investigation looked at both the Norwegian and UK markets as case studies.

According to BOS, that study determined that “there was not sufficient reason to introduce a ban on paying for gambling with credit cards.” The document also determined that introducing a ban would cause issues for operators because customers can link credit to debit cards. “It would mean great difficulties to prohibit payment with a payment card when a credit is linked to such a card,” the document explained.

BOS said the government is now introducing a ban on gambling with credit “contrary” to what its own investigation has concluded. “It is sad that the government does not listen to its own expertise,” Gustaf Hoffstedt, Secretary General of BOS, said. He argued that the ban would work in favor of unlicensed gambling companies who would not introduce such measures, growing the already large black market.

Swedish operators have blamed restrictive regulation for the nation’s failure to reach channelization targets for licensed offerings. In November last year, data published by ATG showed that the number of Swedish gamblers using legal channels has been decreasing steadily since 2019. Online sports betting channelization is at around 88%, while online casino is at 74%.

Look to the UK

BOS has certainly made some solid points. All changes to regulation should be evidence-based and in this situation, it seems the Swedish government is looking to appease anti-gambling voices more than it is seeking to have an impact. That said, the response to the proposal from operators has been very different to that in the UK.

The UK government introduced a credit card gambling ban in April 2020 to no real opposition from gambling operators. In fact, the Betting and Gaming Council – the UK’s version of BOS – welcomed the news. In 2020, Brigid Simmonds, Chairman for the trade group, said operators were ready to implement the ban, which would add an additional measure “to protect the consumer.”

After the ban, 76% of people who previously gambled on credit did not do so

Meanwhile, in an interim report on the effect of that ban in November 2021, the UK Gambling Commission concluded that it did not lead to “unintended consequences.” The regulator detected no breaches of the ban by operators and determined that it was implemented effectively across the board. After the ban, 76% of people who previously gambled on credit did not do so.

Perhaps most importantly regarding Sweden, the UK detected no increase in unlicensed play. “Our sources have not identified any displacement to black-market sources as a result of the credit card ban, although the motivations of the individual for gambling with an unlicensed operator are rarely known,” the Commission explained.

Not the hill to die on

Gambling operators have to choose their battles wisely, particularly in markets where regulators are so eager to tighten the leash even more. In Sweden, this is very much the case. Under pressure from gambling opponents and failing channelization, local officials are keen to show that they are doing anything to protect consumers more. Evidently, the credit card ban was incoming regardless of what the 2023 report concluded.

In addition, if operators need to sacrifice something, credit card gambling certainly isn’t a bad thing to lose. Only 60% of 50 operators asked by the SGA admitted that they offer credit cards as one of the payment methods on their platforms. An even smaller percentage of customers will actually use that option, based on figures from other markets.

should gamblers have the option to bet with money they don’t technically have?

Then, of course, there is the ethical question to consider. If we are championing customer safety, should gamblers have the option to bet with money they don’t technically have? As mentioned previously, gambling operators provide fun for countless people across the globe, but indebtedness is certainly not part of that fun. If that can be taken out of the equation without dire consequences, as we have seen in the UK, then operators should get behind it.