Gustaf Hoffstedt, secretary general of the Sweden Trade Association for Online Gambling (BOS), has criticized a recent proposal by Hasse Lord Skarplöth, CEO of AB Trav och Galopp (ATG), to raise Sweden’s gambling tax. Hoffstedt described the suggestion as a form of “self-harm” to the country’s well-established market.
Skarplöth introduced the idea earlier this week, advocating for Sweden to follow the UK’s lead in increasing tax rates for licensed online operators. He proposed that horse racing should remain exempt from this tax hike. The UK government announced last week in its autumn budget an increase in remote general betting duty from 15% to 25% starting April 2027, and an increase in remote gaming duty from 21% to 40% from April 2026. Exemptions were made for horse racing, self-service betting terminals, spread betting, and pool betting.
In response, Hoffstedt argued that such a tax hike could inadvertently bolster what he referred to as “one of Europe’s largest black markets.” He expressed concerns that higher taxes would not mitigate risks but instead drive players towards unregulated offshore platforms, ultimately weakening consumer protection and the regulated market’s ecosystem.
“The idea of raising taxes on online casinos in a market with such a significant black market presence is not a precise measure; it’s self-harming,” Hoffstedt conveyed. “Rather than reducing risks, higher taxes could push players offshore, diminishing consumer protection and shrinking our regulated ecosystem.”
Hoffstedt’s primary worry centers around channelisation, the rate at which gambling activity is conducted through legal channels. Last month, ATG reported that Sweden’s online gambling channelisation rate stood between 74% and 85% during Q3 of 2025. The Swedish regulator, Spelinspektionen, estimated the rate at 85% in 2024, marking a 1% decline from the previous year.
These figures fall short of the government’s long-term channelisation goal of 90%, established in 2019 when Sweden’s regulated iGaming market was launched. Hoffstedt maintained that increasing taxes on online gambling could widen the gap between licenced and unlicensed operators, thus further reducing the channelisation rate.
“The solution to problem gambling is not higher taxation; it lies in effective regulation, which starts with channelisation,” he said. “Increasing taxes does the opposite of responsible policy if the objective is channelisation and user safety.”
Hoffstedt also questioned the rationale behind focusing tax increases specifically on the iGaming sector. BOS recently published data indicating that gambling-related problems have not risen since the legal online gambling market began in January 2019. According to BOS, 1.3% of Sweden’s population had a Problem Gambling Severity Index (PGSI) score of three or more in Q4 2024, down from 2.2% when the market opened. This decline occurred despite the sharp rise in online gambling availability.
“For those without risk, all forms of gambling seem equally harmless,” Hoffstedt commented. “However, for individuals with existing gambling issues, all types of gambling pose dangers, particularly within the lottery segment where the highest share of problem gamblers is found.”
Reflecting on Skarplöth’s proposal, Hoffstedt suggested that, if a tax increase were to occur, it should target horse racing betting rather than online casinos. He argued this approach would be more “rational” in terms of improving channelisation and consumer protection, reducing the financial burden on online operators.
“The horse betting segment in Sweden boasts a channelisation rate between 98% and 99%,” he noted. “From a channelisation and consumer protection standpoint, it would be more logical to increase the tax on horse betting while reducing it for other forms of gambling.”
This stance aligns with BOS’s recent opposition to a proposed ban on online bonuses in Sweden, put forward by Svenska Spel and ATG. BOS accused these operators of attempting to expand their market share at the expense of player protection. Hoffstedt warned that such a ban could drive players to unlicensed sites that offer bonuses without the same safeguards as regulated brands.
While industry leaders like Hoffstedt express concern about potentially adverse effects, proponents of higher taxes, such as Skarplöth, argue that aligning with the UK’s fiscal strategy could secure additional revenue for social programs and improve oversight. The debate highlights a broader industry tension between fiscal policy and market integrity, with the need to balance state interests against the backdrop of player safety and market regulation.
As the conversation continues, stakeholders are urged to consider all angles. Effective policy must weigh the economic benefits of increased taxation against the risks of decreased channelisation and consumer protection. The path forward demands a nuanced approach that addresses both market integrity and public interest.
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