“ I don ’ t see why ( the state ) has any role in a completely open and competitive market . It has become a money grab , and even the ministries of finance around Europe know there is going to be an end to this model , but they ’ re going to milk it as long as they can .”
“ I don ’ t see why ( the state ) has any role in a completely open and competitive market . It has become a money grab , and even the ministries of finance around Europe know there is going to be an end to this model , but they ’ re going to milk it as long as they can .”
— Morten Ronde , CEO for the Danish online gambling trade body Spillebranchen
liament for four years , with politicians considering anything from a whistleto-whistle advertising cap to a complete advertising ban .
“ Something will happen ( eventually ) and as a trade association , that ’ s where we try to ensure that it ’ s more of a soft landing for the industry ,” Ronde explains .
Discussions around raising the gambling tax rate from 20 percent to 29 percent have also stirred in the past four years , but these conversations seem to have been put on hold for now , Ronde suggests . Politicians in Denmark are notably less concerned with the activity of the gambling industry than many of Europe ’ s neighboring regions .
It could also be the case that the Social Democratic Party , which has been in power for the past three terms , most recently as part of a threeparty coalition , is largely neutral on gambling .
Competition Killer
But Denmark didn ’ t get everything right in its market liberalization . One area Ronde ’ s Spillebranchen argues against today is gambling monopoly Danske Spil competing against commercial operators to offer online casino and sports betting products , while maintaining its government ownership .
Denmark , Sweden , Finland , Norway and France all have gambling monopolies today , with the state owning a full or part share in the operator in each instance . Those operating in open markets ( all except Norway and Finland until January 2027 when the licensed market launches ) have exclusivity over the national lottery and land-based gambling , and in the Nordic markets ’ case , horseracing .
Ronde and his Swedish counterpart , Gustaf Hoffstedt of the Swedish trade association ( BOS ), have fought tirelessly to bring an end to the monopoly model , arguing the state ’ s involvement in a competitive private sector like online gambling presents many conflicts of interest . But politicians are staunch in their support of the monopolies .
“ I don ’ t see why ( the state ) has any role in a completely open and competitive market ,” Ronde says . “ It has become a money grab , and even the ministries of finance around Europe know there is going to be an end to this model , but they ’ re going to milk it as long as they can .”
In Denmark ’ s case , Danske Spil was allowed entry into the competitive online market when it was launched . The market was the first in the Nordics to open up and therefore did not have a model to follow and learn from .
“ There was a real concern that no operators would be interested in taking a license , so there needed to be at least one licensee in the market and that would be the state-owned operator ,” Ronde says .
“ Danske Spil was not meant to have any advantages . It was written
clearly in the law that there had to be arm ’ s length between the commercial entity and the lottery . But of course , the lottery did everything they could to circumvent that rule .”
Today , Danske Spil maintains a 25 percent share of Denmark ’ s commercial market , down significantly from around 60 percent in 2012 . The theme of dropping market share among monopoly operators is also being felt in Sweden and Finland .
In fact , many of Finland ’ s stakeholders believe the market ’ s rush to liberalize online gambling is an effort to save the monopoly , Veikkaus , from continuing to suffer market share and earnings losses . Veikkaus ’ latest figures suggest the operator has a 20 percent share of the Finnish market today , despite being the only licensed operator available .
Hoffstedt , a former politician for Sweden ’ s Moderate Party , expects the monopoly model will come to an end eventually , with governments eventually selling off their stakes to private operators .
“ The normal way ( a private sector industry runs in ) Western society is private companies run businesses while governments and parliaments set and supervise the rules . But among the Nordic countries , the state is also quite an aggressive commercial operator . Neither Denmark nor Sweden has managed that process in a good way so far ,” Hoffstedt laments .
Here We Go Again
The industry was particularly excited about Sweden ’ s market opening in 2019 as the country had become something of an online gambling hotspot and hub of gaming innovation . The market was notably quite lenient with the unlicensed market before it launched a licensed model , Hoffstedt says . Operators happily existed in the gray market , with channelization for the monopoly at only 50 percent prior to the 2019 market launch .
Legislators in Sweden largely followed Denmark ’ s process , including allowing Svenska Spel some competitive advantage over other operators . The monopoly was able to cross-sell its lottery players to online casino and betting in certain circumstances . It also used its widely known lottery and land-based branding to draw in customers .
To navigate competition law , Svenska Spel was split into two entities within a holding company , one monopoly entity and one competitive entity . Svenska Spel , Hoffstedt says , has experienced reasonable success in the open market compared to the private operators . “ They are not very successful , just reasonably successful .”
Sweden ’ s Moderate Party and BOS called on the government in June 2022 to privatize Svenska Spel ’ s competitive business . These plans have not yet been put into action , even after the party took power that year . Its coalition partner , the right-wing populist Swedish Democrats , has since
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