Sweden Proposes Higher Taxes for Online Gambling Operators

• 03 Mar 2025

Sweden's Finance Ministry has unveiled its budget for the upcoming fiscal year, surprising online gambling operators with an unexpected tax rate increase. This move, outlined in a 413-page budget proposal, would see the gross gaming revenue (GGR) tax rise from 18% to 22%, scheduled to take effect in July of the following year. Since the re-regulation of Sweden's gambling market in January 2019, there have been no changes to the gambling tax on gross revenue.

According to Minister of Finance Elisabeth Svantesson, the 22% tax rate is aimed at achieving a channelization rate of at least 90%, potentially increasing annual tax revenue by slightly more than SEK 500 million (US$44.8 million).

Justification for the tax hike is rooted in the belief that Sweden's gambling market has become more stable since the reintroduction of licensed gambling, resulting in increased channelization. Consequently, the government argues that it can afford to impose a tax that is "well balanced," benefiting its coffers without severely impacting operators.

Svantesson explained that the initial plan considered a tax rate exceeding 20%, but the government chose a more gradual approach to provide gaming operators with a smoother transition.

However, the proposal is not set in stone. The Finance Ministry will present a formal proposal to the Riksdag, Sweden's government, next year, reflecting the recommended increase, but there is a possibility of opposition from the Riksdag.

In comparison, online casino operators in Germany currently pay a tax rate of approximately 19% on their GGR, while Italy imposes a 25% tax rate.

The Swedish Online Gaming Industry Association (BOS), which counts Flutter, Entain, and other major gaming companies among its members, is not pleased with the proposal. BOS has already committed to contributing additional funds to the government to combat organized crime and prevent illegal gaming operators from targeting Swedish consumers.

BOS fears that the tax increase could backfire, potentially driving some operators away from the licensed space and into the unlicensed sector to evade taxes, a scenario reminiscent of the Philippines' experience when it raised taxes on the Philippine Offshore Gaming Operator Segment (POGO), with devastating consequences.

Gustaf Hoffstedt, Secretary General of BOS, expressed concern that the tax hike could have a negative impact on gaming revenue, given the current channelization rates of 72% for online casinos and 77% for the gaming market as a whole. Hoffstedt finds it "bizarre" that the Finance Ministry believes otherwise and anticipates that the Riksdag will support the proposal, leading to significant effects on channeling. Consequently, he believes that the gaming industry should brace itself for another round of re-regulation.