Swedish Gambling Authority Responds to Government's 4% GGR Tax Increase Proposal

Date: 2023-12-06 Author: Dima Zakharov Categories: EVENTS
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Government Aims for Fiscal Boost without Disturbing Market Stability

The Swedish government's proposal, introduced in September, aims to raise the GGR tax rate from the current 18% to 22%. This move is a revisit to the initial taxation set when the market underwent re-regulation in 2019. The initial 18% tax rate was a precautionary measure to foster market growth.

Rationale Behind Tax Hike

As channelization stabilizes and government revenues require a boost, the Swedish government is considering the tax hike. Raising the GGR tax from 18% to 22% is seen as an appropriate measure to enhance government funding without significantly impacting companies or the overall tax base.

Timeline and Potential Implementation

The proposal is set to be presented to parliament in the spring of 2024, with potential implementation starting from July 1, 2024, pending approval.

Spelinspektionen's Response and Concerns

Spelinspektionen, in its response, acknowledged no major objections to the proposed tax increase but highlighted potential repercussions. The regulator expressed concerns about the impact on the channeling rate due to an increase in the tax on gambling, among other factors.

Alarm on Gaming Industry Downturn

Drawing attention to recent market trends, Spelinspektionen pointed out a downturn in total market turnover over the past two quarters, particularly impacting license holders. The decline could indicate changes in the gaming market that might lead to a reduced tax base, with uncertainties persisting regarding whether this downturn is temporary or more permanent.

Industry Reaction and Criticism

In September, when the proposal was first introduced, BOS, the Swedish Trade Association for Online Gambling, criticized the government's lack of understanding of the market's vulnerability. Gustaf Hoffstedt, the Association's secretary general, emphasized the need for a better understanding of the market they govern.

Concerns about Channelization Rate

Hoffstedt highlighted concerns about the market's channelization rate, currently standing at approximately 77% but dropping to as low as 72% in certain verticals like online casinos. He noted a declining trend in channeling over time and predicted that if the proposal is approved, channelization will continue to decrease.
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