The Swedish gambling market: The upcoming re-regulation, part 2

21 December 2018

A new chapter in the history of gambling in Sweden lies just around the corner. On January 1st, the new legislation is set in place and todays’ off-shore regulated companies must, from then, follow Swedish law if they wish to continue to operate in Sweden. In this three-part blog series, Mediavision gives an outlook of the Swedish gambling market – and what we expect of 2019.

Part 2: Consumer preferences – different types of gambling

Today we are delving into consumer preferences vis-à-vis different types of gambling. If we start by looking at monthly reach per gambling type, lotteries and scratch cards currently dominate in KPI “monthly reach”. But, since lotteries as well as scratch cards are gambling types exclusively for Swedish actors, they tell us very little about the overall competition on the market.

Monthly reach per gambling type, H1 17 vs H1 18

By excluding these state-controlled verticals, the picture changes. Instead, focusing on the online verticals, the competition gets a lot tougher. The off-shore actors are steadily increasing their market share, as illustrated in part 1 of this blog-series. Below we illustrate the distribution of both monthly gamblers and spend.

Distribution; monthly gamblers & pend (SE-regulated vs off-shore)

One of the main reasons behind the discrepancy between reach/spend is ATG’s position in horse racing (greatly impacts spend among Swedish actors). If we instead illustrate monthly spend more granular, divided into gambling types, the picture becomes more interesting.

Distribution of monthly spend, SE-regulated vs off-shore actors, H1 18

Online casino, poker and sports betting are dominated by the currently off-shore regulated actors. Also, these companies have steadily been gaining ground over the recent years. And as shown, horse racing monopolist ATG retains a very strong position. Mediavision can conclude that ATG accounted for 90 percent of all gambling spend on horse racing during the first half of 2018.Off-shore actors have yet to make a dent in the horse racing vertical.

Under the new legislation, off-shore companies can challenge ATG on horse race gambling. And likewise, ATG can (and will, as announced earlier this year) challenge the other operators in sports as well as casino. In some other verticals, Svenska Spel has already met significant competition; in sports betting Svenska Spel “only” accounted for approx. 35 percent of all consumer spend during the first six months of 2018 – implying that as much as 65 percent was captured by off-shore brands (e g Unibet, Bet365 and Betsson). For ATG, it remains to be seen if it is possible to retain todays dominant position. The younger gamblers seem to be a lot more difficult to attract – a potential future worry.

We have already found that the Swedish gambling market is characterized by increasing competition. And even more so as all actors on the Swedish gambling market will go head-to-head on equal terms for the first time in 2019. This in turn leads to increased likelihood of mergers as well as co-operation between operators. 2019 is certain to be a very eventful year on the Swedish gambling market.

For more information, contact Sixten Ekström, Communicator, or Adrian Grande, Analyst at Mediavision.