Sweden revamps channelisation rate calculation

Garance Limouzy October 2, 2024

The Swedish Gambling Authority (Spelinspektionen) has published a focused on an improved method for calculating the channelisation rate within the Swedish gambling market. This report is part of a government mandate aimed at improving the measurement and reporting of the share of Swedish gambling that takes place through licensed operators.

The channelisation rate, which refers to the share of gambling on the regulated, competitive market that takes place through licensed providers, has become a crucial metric in assessing the success of Sweden‘s licensing system. In its latest report, Spelinspektionen estimates the channelisation rate for 2023 to be 86 percent.

A new approach

“It is also relevant to examine the channelisation rate in monetary terms in addition to the rate for the proportion of players, in order to get a complete picture of gambling outside the licensed system,” explained the regulator.

The report stresses the lack of a universally accepted definition of the channelisation rate. The agency has employed several methods to arrive at its figure, including:

Player surveys

Internet traffic measurements

Estimates of turnover from internet traffic

Data from market research firm H2 Gambling Capital

“The channelisation rate varies depending on the method and the type of gambling,” said Camilla Rosenberg (pictured above), Director General of Spelinspektionen. “We believe that combining these four indicators gives a comprehensive view of the channelisation rate.” The report found that betting generally has a higher channelisation rate compared to online casinos. For 2023, the channelisation rate estimates ranged from as low as 78 percent to as high as 91 percent, depending on the method used. The channelisation rate for this year calculated solely from data provided by H2 Gambling Capital suggests a high figure of 91 percent, however, it is estimated at 86 percent based on the average of the four indicators.

Channelisation in Sweden

Sweden introduced a licensing system for its gambling market in 2019, aiming to bring previously unlicensed online gambling into a regulated environment. Since the introduction of the licensing system, Spelinspektionen has regularly monitored the channelisation rate, providing essential data to the government and the industry.

Despite the progress made, the report acknowledges the continued presence of gambling on unlicensed websites. Many players cite better bonus offers and greater chances of winning as reasons for turning to the black market. Spelinspektionen notes that although only a small percentage of players engage with unlicensed sites, they often wager larger amounts than those using licensed platforms.

Spelinspektionen also found that many players are unaware of whether the website they are gambling on has a Swedish license. Many respondents who answered “don’t know” to this question were, in fact, gambling on licensed websites.