What drove players to offshore betting sites?
Sweden’s gambling market shifted dramatically after the 2019 Gambling Act. Players moved to offshore platforms as regulatory restrictions tightened on licensed sites. This created a gap between what licensed operators could offer and what players wanted.
Regulatory timeline since 2019
Sweden’s Gambling Act launched 1 January 2019, splitting the market into three sectors: open competitive interactive gambling, government monopoly for land-based casinos/gaming machines, and non-profit lotteries/bingo.
Initial framework imposed 18% gross win tax on licensed activities, later increased to 22%. Government added extensive responsible gambling requirements:
- Mandatory self-exclusion via Spelpaus.se platform
- Pre-commitment tools for time/spend limits
- Self-test features for behaviour monitoring
July 2023 brought gambling software permit requirements. All operators manufacturing, supplying, installing or modifying gambling software need permits costing SEK 120,000. April 2025 introduced credit payment bans for gambling transactions.
Spelinspektionen received increased funding to SEK 97.9 million for 2025, strengthening supervision and anti-money laundering measures.
Licensed site limitations frustrate players
72% of Swedish gamblers cannot distinguish legal from illegal sites, survey data shows. This confusion helps offshore operators attract players unaware of licensing status.
Licensed operators face restrictions offshore competitors ignore. Bonus limitations hit hardest – licensed sites offer bonuses only to first-time players. Swedish authorities proposed additional bans on betting individual offences (yellow cards, penalties), match segment losses, and minor performances.
Swedish players choose unlicensed sites for three main reasons according to bästabettingsidorna.se
- Larger game supply and features – More betting options, bigger payouts, faster games
- Better benefits and usability – Customer perks, easy processes, quick payouts
- Motivation factors – Curiosity and entertainment drive offshore exploration
Offshore gamblers show more diverse gambling motives, gamble more frequently, and score higher on problem gambling measures than onshore players.
Restricting licensed operators doesn’t prevent vulnerable area wagering – it just shifts activity to offshore platforms. Online access makes offshore operators “a click away,” drawing players despite potential risks.
Offshore platforms exploit regulatory gaps
Unlicensed gambling sites target Swedish players through specific loopholes in the country’s regulatory framework. These operators work around Swedish laws while maintaining access to local customers.
Foreign domains and payment workarounds
Sweden’s regulatory framework contains a significant gap that unlicensed operators exploit. According to the Swedish Trade Association for Online Gambling (BOS), operators only face restrictions when they explicitly target Swedish consumers using Swedish language or processing transactions in Swedish krona (SEK).
Offshore platforms sidestep these rules by operating websites in English rather than Swedish and processing payments in euros instead of SEK. Most Swedish citizens understand English well enough to navigate these sites. These operators avoid Swedish .se domains, using international domains like .com, .io, or .tv instead.
Payment processing offers another workaround. Payment service providers must reject transactions under Merchant Category Code 7995 (gambling) unless they involve licenced operators. Many offshore platforms use alternative payment methods that don’t fall under this classification. Six of the top 20 unlicensed sites processed direct deposits and withdrawals via Swedish bank accounts using BankID.
Targeting Swedish players without licences
Spelinspektionen determines whether gambling sites target Swedish users by looking for specific indicators. These include information for Swedish customers, Swedish language options, Swedish contact details, and payment options from Swedish-registered companies.
Operators have developed methods to engage Swedish players without triggering regulatory action. They use affiliate marketing, place advertising banners on Swedish websites, and work with influencers on Instagram and Twitch to reach Swedish customers.
These sites create confusion about their legal status. About 72% of Swedish gamblers cannot distinguish between legal and illegal sites. This confusion benefits unlicensed operators as players unknowingly choose their services.
Enforcement challenges with international operators
Sweden struggles to enforce regulations against international operators. Out of 31 unlicensed operators prohibited by the Swedish Gambling Authority and reported to police, 24 continued targeting Swedish customers. This shows the limitations of current enforcement.
Curaçao-based operators present particular challenges, constituting a substantial portion of the unlicensed market. Authorities in Curaçao have not responded to cooperation requests from the Swedish Gambling Authority, creating a safe haven for operators bypassing Swedish regulations.
Sweden introduced a gambling software permit requirement in July 2023. All entities that manufacture, supply, install, or modify gambling software for the Swedish market must obtain a permit costing SEK 120,000. The goal is creating a closed-loop system where permit holders and licence holders only conduct business with each other, isolating non-licenced actors from the Swedish market.
Traffic to unlicensed gambling sites has increased tenfold since 2019, showing current regulatory tools remain insufficient.
Why Swedish players choose unlicensed casinos
Unlicensed gambling platforms attract Swedish players through specific features unavailable on regulated sites. Spelinspektionen data shows clear motivations driving this migration to offshore alternatives.
Generous bonuses and promotions
Bonuses drive 32% of Swedish gamblers to unlicensed platforms—up from 21% in 2021. This increase reflects dissatisfaction with Sweden’s strict bonus rules.
Licensed Swedish operators offer only one welcome bonus per player relationship. Unlicensed casinos provide:
- Multiple welcome packages and reload bonuses
- Regular promotional campaigns
- VIP loyalty programmes
- Cashback on losses
These ongoing incentives create engagement that licensed operators cannot match. Players familiar with international gambling before 2019 find Sweden’s restrictions particularly limiting.
Fewer gameplay and deposit restrictions
Better odds motivate 25% of survey respondents choosing unlicensed sites. Deposit limits add another constraint—Swedish-licensed casinos imposed SEK5000 (£402/€462) deposit limits until November 2021.
Unlicensed operators offer:
- Higher deposit/withdrawal thresholds
- No mandatory session time limits
- Extensive game libraries from multiple providers
- Unrestricted gameplay features
High-volume players find these differences decisive. Freedom from responsible gambling interventions drives some toward riskier environments.
Anonymity and privacy appeal
Spelpaus creates an unexpected problem: 26% of unlicensed site users report accessing them because they’re locked out of licensed Swedish sites—up 6% from previous year.
Rather than protecting players, Spelpaus channels vulnerable gamblers toward unregulated alternatives. Unlicensed operators exist outside this self-exclusion framework, allowing circumvention of protective measures.
Licensed operators require identity verification through personal identification numbers and strict know-your-customer protocols. Some players prefer offshore sites’ relative anonymity, particularly those accepting cryptocurrency or having less rigorous verification.
Player confusion about site licensing status increased from 7% to 10%, benefiting offshore operators as players unknowingly choose unlicensed services.
Risks for players on offshore betting sites
Offshore betting sites attract Swedish players with better offers but expose them to serious risks. These platforms operate outside Swedish regulation, creating potential financial and legal problems for users.
No consumer protection or dispute resolution
Players on unlicensed sites have no protection from Swedish gambling authorities. Disputes with offshore operators cannot be resolved through Spelinspektionen, leaving players without recourse when problems occur. These sites don’t need to follow Swedish consumer protection laws or implement responsible gambling tools.
Unlicensed platforms aren’t required to monitor gambling patterns or intervene when players show problematic behaviour. This creates dangerous conditions for vulnerable players, as offshore operators have no duty to implement protective measures against excessive gambling.
Higher fraud and data risks
Unlicensed platforms present significant security risks for personal and financial information. These operators aren’t subject to Swedish data protection requirements or anti-money laundering protocols. Players face various fraud risks:
- Account takeovers through phishing attacks
- Payment fraud using stolen credit cards
- Identity theft through poor verification
- Collusion and cheating in multiplayer games
Many unlicensed sites have been linked to fraud schemes that exploit online gambling’s anonymity. Without regulatory oversight, these platforms may lack adequate security measures, leading to data breaches and information misuse.
Tax implications for unlicensed site winnings
Swedish players face significant tax liabilities when using unlicensed platforms. Winnings from Swedish-licenced operators are tax-free, but players must pay 30% capital gains tax on winnings from foreign sites without Swedish licences.
Players must report these winnings to the Swedish Tax Agency (Skatteverket) through income tax returns under “income from other sources”. This obligation exists even if the operator doesn’t report winnings to Swedish authorities.
Non-EU licenced operators create additional tax complications. Swedish players face competitive disadvantage since winnings are subject to 30% tax, whilst this doesn’t apply to EU-licenced operators.
Can Sweden regain control of its gambling market?
Sweden faces challenges from unlicensed betting sites. Gov targets 90% channelization. Current rates: 70-82%. Authorities explore strategies to reclaim market control.
Role of Spelinspektionen in enforcement
Spelinspektionen leads regulatory battle. Funding increased: SEK 97.9 million for 2025. National Audit Office criticised regulator as “not effective enough.” Too few inspections. Limited follow-up on corrective actions.
Critical weakness: legal definition of illegal gambling. Only operators explicitly targeting Swedish consumers through Swedish language or currency face penalties. Loophole remains for English-language sites accepting Swedish players.
Potential for international regulatory cooperation
International cooperation vital. Sweden ratified Macolin Convention—global agreement tackling match-fixing. Framework enables info sharing between gambling operators, sports authorities, police across participating nations.
Sweden joined ten other EU nations including Spain, Italy, France. Cooperation challenges persist with Curaçao jurisdiction. Many unlicensed operators base operations there.
Future of responsible gambling in globalised market
Sweden developing tech approaches to responsible gambling. Swedish Gambling Authority investigating exclusion from individual licence types. Additional exclusion periods through Spelpaus system.
Sweden continues refining regulatory framework. Proposals include expanding Gambling Act scope to criminalise all operators passively receiving Swedish consumers. Aims to close “directional criterion” loophole. Combined with advanced player protection measures, could reverse tenfold increase in unlicensed site traffic since 2019.
Conclusion
Sweden’s gambling market shifted dramatically since 2019 Gambling Act implementation. Player migration to offshore platforms continues despite regulatory efforts. Current channelization rates remain 70-82%, well below the 90% target.
Players choose unlicensed sites for generous bonuses, fewer restrictions, and perceived anonymity. Swedish licenced operators face bonus limitations, deposit restrictions, and extensive compliance requirements. Offshore competitors bypass these constraints entirely.
Spelinspektionen struggles with enforcement gaps. The directional criterion allows English-language sites to accept Swedish players without penalties. Curaçao-based operators ignore Swedish regulatory requests. Out of 31 prohibited operators, 24 continue targeting Swedish customers.
Unlicensed platforms expose players to significant risks. No consumer protection or dispute resolution available. 30% capital gains tax applies to winnings from foreign sites. Data security concerns and fraud risks increase substantially.
Sweden needs multiple regulatory approaches. Closing legal loopholes remains priority. International cooperation through Macolin Convention offers potential solutions. Enhanced Spelpaus system development continues.
Traffic to unlicensed sites increased tenfold since 2019. Player confusion persists – 72% cannot distinguish legal from illegal sites. Swedish authorities must balance player protection with market competitiveness.
Current regulatory framework inadvertently pushes vulnerable players toward unregulated environments. Effective solutions require addressing core player motivations rather than imposing additional restrictions.
