Aktiebolaget Trav och Galopp’s (ATG) channelisation report for Q4 has shown a continuation of worsening channelisation rates in Sweden.
ATG’s report estimated channelisation rates for gaming to be between 69%-82% in Sweden during Q4. This falls well behind the Swedish’s government’s target of 90% channelisation to legal operators.
The channelisation rate has fallen since the third quarter of 2023. ATG believes there is little sign of the trend being halted.
ATG found visitor traffic to unlicensed operators has increased tenfold since 2019. The research also highlights that out of 20 unlicensed sites with the highest Q4 visitor traffic, 19 shared the same platform providers as licensed operators.
Additionally, of the 20 black-market sites included in the report, none were on the Swedish regulator Spelinspektionen’s banned list.
“It is a very worrying development and our investigation shows that more still needs to be done to keep the unlicensed companies away,” ATG chief executive Hasse Lord Skarplöth stated. “Unlicensed gambling is the biggest threat to the Swedish gambling market and the vulnerable target group with gambling problems.”
ATG requests help from Sweden banks
Of the 20 unlicensed sites with the most Q4 traffic, seven of them offered direct deposit and withdrawal from a Swedish bank account. Black market players can use the identity verification company BankID with payments business Krofort.
Skarplöth has called upon banks in Sweden to halt such transactions, instead driving them towards the legal market.
“In the light of our report, it is absurd that the Swedish Gambling Authority and banks impose high anti-money laundering requirements on us licensed gambling companies while at the same time watching unlicensed gambling companies,” Skarplöth declared.
Europe’s black-market problem
While some European countries excel in channelisation, Germany and France are among those struggling with the black market.
A 2023 study from the University of Leipzig found that nearly half of all online gambling in Germany takes place with unlicensed operators.
The research estimated that three-quarters of online revenue in Germany is generated by the black market. As a result, hundreds of millions of euros in tax revenue are missed out on.
At a conference in October, it was said that Germany’s licensed operators are under more pressure from the black market than ever before.
In France, meanwhile, the country’s gambling regulator l’Autorité Nationale des Jeux (ANJ) estimated the illegal gambling market in the nation to be worth up to €1.5bn (£1.28bn/$1.62bn). This would account for more than 10% of the total wagered across the country each year.
The study, carried out by PwC, approximated the gross gaming revenue generated by illegal gambling is between €748m and €1.5bn. This would be responsible for between 5% and 11% of France’s total gambling market, which was worth a record €12.9bn in 2022.
ATG records rise in FY2023 net profit
Despite the concerns over channelisation rates in Sweden, ATG reported a 7.5% year-on-year rise in net profits to SEK1.45bn (£111.2m/€129.9m/$140.9m) for its 2023 financial year.
While total group revenue was marginally lower at SEK6.04bn, net gaming revenue edged up 0.9% to SEK5.27bn.
“I feel proud of the 2023 figures,” Skarplöth said. “ATG had growth when the total gambling market landed at plus or minus zero.”
