Swedens gaming sector is strongly opposing the government’s proposal to raise betting taxes. They caution that increasing taxes will only force more individuals toward unregulated and illicit gambling platforms.
The government aims to raise the gambling tax from 18% to 22% beginning the following July. However, BOS, the industry organization representing these businesses, claims that this directly contradicts the government’s own objectives for the gambling market. They contend – and claim that even the Swedish Gambling Authority concurs – that higher taxes will actually reduce the legal market and allow illegal operators to enter.
The government’s initial objective was to have 90% of gambling occur through legal avenues. However, data from the industry group reveals that it has already fallen to 77%, and even lower for internet casinos. Their message is straightforward: if the government proceeds with this tax hike, they will witness a significant increase in illegal gambling.
Hofstedt further noted that a Copenhagen Economics study pinpointed an optimal tax range for nations to adhere to, falling between 15% and 20%. “Exceeding 20% translates to diminished revenue through the designated channel and, as per the classic Laffer Curve theory, reduced tax income over an extended period.” He contends that no data suggests Sweden, in contrast to the years preceding its gambling market re-regulation, can currently stray from the recommended tax bracket without negatively impacting the authorized market. Hofstedt offered these remarks during an engagement on the iGaming NEXT: Online Gambling Industry podcast in October, prior to the government’s initial unveiling of its proposed tax strategy.