How Casino Gambling Outside Sweden Affects the Swedish Tax System

Since the enactment of the Swedish Gambling Act in 2019, casinos without a Swedish license have been attracting more and more Swedish players. These casinos are attracting players with better bonuses, fewer restrictions and a wider selection of games than licensed gaming sites.

But while they have some advantages for players, they also pose a serious problem for Sweden's tax system. The decline in the degree of sewage means that an increasing proportion of gambling takes place on gambling sites that do not generate Swedish tax revenue. In this article, we will analyze how this affects the tax system and how much money is potentially lost. Find out about online casinos and football stadiums, and what exactly connects them, by clicking on this link.

Casinos without a Swedish license do not pay taxes in Sweden

A casino without a Swedish license is a gambling site outside of Sweden that has not been granted permission by the Swedish Gambling Authority to operate in the Swedish market. Instead, these casinos have licenses from other countries, usually Malta, Gibraltar or Curacao. The Swedish Gambling Act requires that all casinos targeting Swedish players have a Swedish license and adhere to strict regulations. These regulations include, among other things, the need to promote responsible gambling and pay taxes to the Swedish state.

When a casino has a Swedish license, it means that players can be sure that the casino complies with Swedish laws and regulations. This means that consumer protection on such gaming sites is automatically enhanced. One of the requirements for Swedish casinos is that winnings must be tax-free for players, but the casino must pay tax on its winnings. This means that you do not have to declare or pay any taxes on your winnings if you win money at a casino that has a Swedish gambling license.

When it comes to casinos without a Swedish license, the tax situation is much more complicated. There are two different tax scenarios:

• Casinos with a license within the EU/EEA. The casino may not have a license in Sweden, but have a license within the EU or EEA, for example in Malta or Estonia. In this case, winnings at these casinos are not taxed for Swedish players. This is thanks to the EU rules on the free movement of services, which means that players do not have to pay any taxes on their winnings within the EU.
• Casinos licensed outside the EU/EEA. The second scenario is that the player plays at a casino that only has a license from a country outside the EU, such as Curacao or the UK after Brexit. According to our Swedish tax rules, winnings of more than 100 kronor on such gambling sites must be declared. These winnings are also taxed at a rate of 30 percent of the net winnings, i.e. the winnings after the player's bets have been deducted.

See also: The evolution of video game betting: from in-game loot boxes to online casinos

Channeling and its impact on tax revenues

An important concept related to the gambling market is channeling. It refers to the proportion of Swedes' gambling that takes place at casinos with a Swedish license compared to casinos without a license in Sweden. When channeling decreases, it means that a higher proportion of gambling takes place at casinos without a license in our country. This means that Sweden loses tax revenues. The Swedish state therefore has an interest in ensuring that as many players as possible choose to play at licensed casinos, as this means that taxes are paid in Sweden.

The Swedish Gambling Act was introduced to regulate the gambling market and protect players. Despite this, channeling has decreased in recent years. According to the Swedish Gambling Authority, the channeling rate fell from 85 percent in 2020 to 78 percent in 2023. This means that more players are choosing to play at casinos without a Swedish license. The main reason for this is that these gaming sites can offer more attractive bonuses, a larger selection of games and fewer restrictions. By doing so, they distract players from licensed alternatives, which reduces the level of channeling. This development has resulted in significant tax losses for Sweden.