Swedish Monopoly Operator Losing Market Share And Its Cool

The protectionist regulatory frameworks that have for so long protected some nations’ gambling sectors is not just under threat from EU harmonization but by the nature of human progress itself

The status quo has been around longer than people believe. Despite wars, revolutions, military coups and social uprisings of numerous varieties it always seems to be the rich that are in charge, and if they’re not rich when they arrive in power they tend to become so quite quickly thereafter. They say power corrupts, but actually it just makes you wealthy, and the wealthy will do just about anything to remain so, and some of those measures could be construed as corrupt, especially by people who aren’t rich.

Swedish Monopoly Whines

• New paradigm meets old protectionism
• Svenska Spel’s closed shop under threat
• Uncontrolled market development rued

Conspiracy theorists would have us believe that they are all in cahoots, that there is a larger agenda behind their ever self-interested move, but given the rich dislike each other as much as we dislike them, that little piece of cold comfort is bunk. It would be lovely to believe we’re all kept down by some dark hidden overlords, but the truth is its history and economics that have placed us where we are, not the invisible forces of the new world order, little gray aliens or emissaries of the spirit world.

Much of the time we accept this as the natural order of things, and indeed the desire to be part of the wealthy is what drives many of us to achieve, to progress, to get out of bed in the morning and get things done. Some say that is an illusory goal but there isn’t a gambler alive who’d believe them, and indeed the only time that possibility is even questioned is when someone with no real right or reason from within the protection of wealth starts to complain or whine.

We dislike celebrities that bemoan their problems from their LA mansions and chauffeur driven cars, but whilst they are the most public of perpetrators there are those in business who do much the same thing, and gain much the same amount of sympathy in doing so. Just this week, for instance, the state monopoly gambling outfit Svenska Spel’s CEO decided that the best way to combat a future not to his advantage was to blame people who like to bet on sport in Sweden.

Has The Internet Harmonized More Than The EU?

The Svenska Spel monopoly over gambling in Sweden stretches back far further than the 1997 unification of Tipstjanst and Svenska Penninglotteriet, the two major lotteries in the country prior to that, their duopoly not so much a competition as a cartel, and the Swedish authorities have done much to keep gambling within the nation a closed shop, the liberalization of the market often touted but never actually progressed towards with any real impetus.

Much of the time it is touted to the European Union of which Sweden is a member. One of the EU’s overriding goals to “harmonize” the basis on which services are available across the market, giving freedom of both consumer and provider to operate trans-nationally. In theory this should be in everyone’s interest, a meshing of economic forces that would allow Europe to compete with the massive trading blocks of the Americas or the Far East, in theory.

In practice there’s still a lot of protectionist instinct emanating from both nations and industries that have for too long relied on now moribund regulations or market requirements to protect their position, and Svenska Spel is amongst those that have been most coddled. Whilst officially this has done much to keep its market position unassailable by licensed competitors the arrival of the internet has changed the landscape and has left both the established providers and regulators floundering.

Control of the internet is impossible, just ask the Chinese, and all efforts to do so are circumvented by anyone with the will to do so as quickly as they can Google how to do so. In effect the internet has “harmonized” the world, and struggling in the wake of this unstoppable tsunami the efforts of protected businesses, regulators and even the EU, seem Canute-esque at best. Swedish gambling laws may well be able to exert some force on the physical world, but the digital one has long since slipped the noose.

Can Kall Wish Away The Internet?

The displeasure of Svenska Spel with this emerging paradigm is manifest. Their monopoly of online gambling in Sweden wholly undermined by the internet simply possessing far more places to gamble each as easy to access as their official site. Giants like Bet365 or ComeOn! Sportsbook exist whether Svenska Spel like it or not, and denying people access to these sites is all but a practical impossibility. Not that this stops Svenska Spel demanding precisely that.

“We are calling for rapid and concrete measures from both politicians and authorities to ensure that the Swedish gaming market will be healthy and safe.” Said Svenska Spel’s CEO Lennart Kall, “The prevailing market trend is very worrying.”

Which is business code for “if someone doesn’t do something about this I will schweam and schweam and schweam” and the invocation of public safety is laughable when used to ring-fence a population so that only you can exploit them as a customer base. Kall might well “feel a strong concern over uncontrolled market development” but really his concern is that with tighter marketing regulations at home, and competition from abroad, Svenska Spel’s days are numbered.

Their margins might be slightly up, 20.8% to 22.5% (numbers many businesses will envy) but their market share is down from 22.3% to 21.6% year on year, and that is a trend that does not bode well, and there’s precious little that can be done. Gambling news of a sudden even more protectionist set of regulations (which would anger the EU in a heartbeat) from the government seems a fool’s wager, and to simply wish away the rest of the internet (blocking it won’t work, Lennart) is just ridiculous.