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Concerns Sweden’s Hike in Gambling Tax Will Drive Gamblers to Illegal Market

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Alan Evans

Updated by Alan Evans

News Writer

Last Updated 4th Jul 2024, 11:39 AM

Concerns Sweden’s Hike in Gambling Tax Will Drive Gamblers to Illegal Market

The new excise tax on gambling in Sweden, which increased from 18% to 22% and is expected to increase tax revenue by SEK540m (£40.9m) annually. The tax change has received mixed reactions from the industry, with some arguing it will drive players towards illegal gambling markets and away from regulated casinos.


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Potential Pitfalls of Tax Hikes

Commenting on the tax changes, the gambling regulator, Spelinspektionen, said: 

 “We have no substantive objections” but warned of the possible consequences of the increase. The regulator pointed out the possible channelling of gamblers to the illegal market. 

Gustaf Hoffstedt, the trade association's secretary general, concurred that the unlicensed and illegal gaming market might get a share of the market as a result of the new tax increase.

To put Sweden's tax rate into perspective, here are some examples of gambling taxes around the world:  

Highest Gambling Taxes: 

  • Germany: 90% 
  • France: 80% 
  • Austria: 80% 
  • Luxembourg: 80% 
  • Denmark: 75% 

Lowest Gambling Taxes: 

  • Russia: 0% 
  • Italy: 0% 
  • Cambodia: 2% 
  • Belgium: 2.5% 
  • Czech Republic: 6% 

In many countries, gamblers are not taxed on their winnings. Instead, the bookies pay a percentage of tax on the total bets or winnings they record. 

For example, Irish bookies pay 1% tax on all bets, while Kenyan bookies pay 7.5% tax on all winnings. 

The claim appears to be a reality for Germany. The German gambling regulator GGL says the country's illegal market was worth between €400m and €600m in gross gaming revenue in 2023. 

GGL said that tackling unregulated offerings remains a “challenging task.”According to a new study by Delhi-based policy think tank Centre for Knowledge Sovereignty, India’s inadequate legal framework, selective banning as well as high taxation on legitimate online gaming platforms is acting as a driver of illegal betting and gambling activity which is expected to grow at 30% in coming years.

In some countries, casinos and bookies pay taxes on their profits, while players are exempt from taxation. Here are some examples: 

  • Austria: Casino operators pay a fixed amount per stake, ranging from 35-80%. 
  • Australia: Casino operators pay license fees and taxes on gambling revenue, varying by state. 
  • Belgium: Casino operators pay an annual fee in exchange for a license. 
  • Bulgaria: Casino operators pay a one-time license fee and a turnover tax. 
  • Canada: No tax on winnings for online or land-based casinos. 
  • Czech Republic: Casino operators pay a fixed tax on their profits. 
  • Denmark: Casinos pay a percentage of their gross gaming revenue. 
  • Finland: Casino operators pay a fixed percentage of their net profits, which is donated to charity. 
  • Germany: Casinos pay 90% of their gross gaming revenue. 
  • Italy: Casino operators pay a fixed percentage of their total gaming revenue. 
  • Malta: Casinos pay a licensing fee and a percentage of their gross turnover. 
  • Romania: Casino operators pay a one-time license fee and a turnover tax. 
  • Sweden: The state-owned casino operator Svenska Spel is exempt from taxation. 
  • UK: Casino operators pay a fixed percentage of their gross gaming revenue. 

Players are typically not taxed on their winnings in countries where gambling is legal, but casino and bookie operators must pay taxes on their profits or revenue. In some cases, players may be required to declare their gambling winnings on their tax return. 

 

Meet The Author

Alan Evans
Alan Evans
News Writer News Writer

Most of my career was spent in teaching including at one of the UK’s top private schools. I left London in 2000 and set up home in Wales raising four beautiful children. I enrolled at University where I studied Photography and film and gained a Degree and subsequently a Masters Degree. In 2014 I helped launch a new local newspaper and managed to get front and back page as well as 6 filler pages on a weekly basis. I saw that journalism was changing and was a pioneer of hyperlocal news in Wales. In 2017 I started one of the first 24/7 free independent news sites for Wales. Having taken that to a successful business model I was keen for a new challenge. Joining the company is exciting for me especially as it is a new role in Europe. I am keen to establish myself and help others to do the same.

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