Posted on: July 13, 2022, 11:14h. 

Last updated on: July 13, 2022, 11:23h.

Sweden has taken a more relaxed approach to online gambling than many other European countries. However, a Finland-based, government-led operator, Ålands Penningautomatförening (Paf), wants the country to introduce more controls, not less.

Christer Fahlstedt
Christer Fahlstedt, CEO of Finland-based gaming operator Paf. He believes Sweden, where the company holds a license, needs to increase gambling taxes and reduce gambling advertising. (Image: Vasabladet)

The operator took part last week in Almedalen Week, an annual political gathering in Sweden. It organized a discussion on gaming policy under the heading “The sector we love to hate.” In it, Paf  suggested raising the gambling tax, banning large amounts of gambling advertising, and stopping gambling ads in connection to sports.

In attendance were members of the Parliament representing different parties. All politicians agreed, according to Paf, that Sweden’s licensed online gambling market is much better than it was when it was unregulated. However, adjustments may be necessary.

Clamping Down

Paf presented a proposal for a program to govern gaming in Sweden during the seminar. However, a number of points could lead to drastic changes in the country’s market.

Christer Fahlstedt, Paf’s CEO, said during the discussion that gambling advertising is the main reason for the gambling industry’s poor reputation. He believes that Sweden should follow in the footsteps of other countries, like Belgium, that have limited advertising.  

A reduction in advertising, which includes sponsorships, means a reduction in revenue for sports organizations. For that, Fahlstedt suggested a way to make up the difference.

He suggested that there should be an increase in the gambling tax, moving it from 18% to 21%. However, none of the panelists showed a lot of enthusiasm for the idea.

Many politicians wanted to distinguish between advertising for different forms of gambling. For example, in their estimation, lotteries and betting are frequently portrayed as less dangerous.

Fahlstedt disagrees. He said that gambling is always gambling, making a vain attempt to compare it to alcohol. He argued that it isn’t possible to “sell light beer to alcoholics,” although the analogy seems to ring hollow. Because Sweden’s gambling industry is overwhelming healthy, there are substantially more recreational gamblers than abusers.

Fortunately for the gambling industry, Fahlstedt didn’t find a lot of support. Swedish MP Angelic Lundberg stated, “Our party supports the regulation we have today and we want to appoint a proper investigation after five years to fix what is needed.”

Another MP, Daniel Wykman, added that the current system is “as good as it gets. However, he also recognized that there is always an opportunity to explore options. “I would give it 2.5 points on a five-point scale. You need to adjust the margins in it,” Wykman said.

Paf on the Wrong Side of Gambling

It’s unusual for a gambling operator to suggest an increase in taxes. However, Paf, which is licensed in Finland, Sweden, Spain, and other jurisdictions, is a different type of company. It is owned by the government of the Åland Islands in Finland in an effort to raise money for various civil and cultural programs.

Paf was reportedly the first operator to introduce loss limits. In 2018, according to Gaming Intelligence, it set an annual upper threshold of €30,000 (US$30,288). Because it is a government-led company, Paf asserts that everything it does centers on responsible gambling.

That isn’t always the case, though. Last year, Finland hit the company with a fine of €250,000 (US$252,000) on charges it was negligent in its anti-money-laundering (AML) protocols.

A single customer, on occasions, deposited as much as €20,000 (US$20,162). Over a nine-month period, the individual deposited €580,000 (US$584,524). Paf knew of the deposits, verified that the individual didn’t have the income to support the amounts, but eventually let the issue fall off its radar.

A Finnish court initially wanted to charge Paf’s CEO at the time with violating AML rules. However, it ultimately just targeted the company.

Sweden doesn’t have a large problem gambling segment, according to Bio Med Central. About 1.3% of the population “experienced gambling problems,” per data from 2018. As a result, there doesn’t appear to be a strong foundation for Paf’s suggestion that the country needs to apply more pressure to its gambling industry.