Why Was the Swedish Gaming Act Devised?
The popularity of Casinos has always been high, and nowadays it continues to grow further. There are thousands of gambling websites around. As one of the most sought for pastimes, online casinos might get out of control.
Today, playing in an online casino is associated with lots of joy and pleasure. But this industry is not devoid of problems as well. Due to the sheer number of online casinos available for choice, and an abundance of payment methods players can make use of, gambling attracts parties that often seek to scam people. This can result in fraud, money laundering, gaming addiction abuse and so on.
This is what Swedish government strives to protect its citizens from by making the legislation strict and clear. This also helps players to manage their losses better and be more protected overall. In order to play at a Swedish casinos, one has to be properly identified. Apart from that, the number of bonuses available to a single player has been drastically reduced, which makes harder to attract new clients for the casino. While these measures are intended to protect players’ interests. they make many gamblers seek for better terms in the casinos without a Swedish license.
Seeing how they lose potential tax revenue, the Swedish government decided to come up with a new Gaming Act in 2019, which obliges all the casinos willing to target Swedish consumers to get a license from the Swedish Gambling Authority. Still, many Swedish gamblers prefer to spend their free time at casinos without a Swedish license simply because it is not prohibited in any way, and they can win substantially more then, not to mention better bonuses and promotions.
What Does it Take to Get Swedish Gambling License?
Every gaming website willing to operate across the territory of Sweden and target Swedish players must apply for a license from the Swedish Gambling Authority (SGA). There is a hefty list of requirements a casino must meet in order to continue its operation in Sweden after January 1, 2019.
- There should be no credit play
- It is allowed to grant only one bonus to a player
- Casino must keep track of all the player’s gaming history
- Casino must partner up with a responsible gambling organization
- It should be possible for players to limit themselves
- In order to withdraw funds, a player must be identified with BankID
- There must be loss and deposit limitation functionality
- Severe moderation of business advertising
- Every bit of information must be translated to Swedish
As you see, there is lot to keep track of in order to comply with the newes Swedish gambling legislation. Many operators choose to not to opt in for a Swedish license because all the changes they are obliged to make would cost tremendous amounts of money. So for them, it makes more sense to withdraw from the Swedish market officially but to continue accepting Swedish punters nonetheless, because it is perfectly legal.
Do I have to pay taxes on my winnings at an unlicensed casino?
To answer this question, first, we must understand that the situation may vary and that it depends on a multitude of factors. In general, the winnings at an unlicensed casino are not tax-free. But this concerns only those casinos that are licensed outside of Europe, such as the ones holding the Curacao eGaming license. You will have to pay 30% tax on winnings over 100 SEK in those casinos.
At the same time, the casinos licensed in a European country, such as Malta, let you win without thinking about taxes, even though they don’t possess Swedish license. But there is a catch. The winnings will be only tax-free if the casino doesn’t target Swedish players. It’s a dodgy subject but you can easily tell if the casino targets Swedish players or not simply by looking at its website. Here are some key points you should be aware of:
- Check If the site has Swedish text
- Check If games are offered in Swedish kronor
- Check If bonuses and promotions are marketed with SEK as the currency
In case a website has any of the above, it means that it is aimed at Swedish players and the winnings on this website would not be tax free, you will have to pay 30%.
Examples of casino winnings and taxation
In order to illustrate how the taxation in an online casino without Swish license would work, we’ve come up with these three examples:
Example A: Gambling at a casino with a license in Malta aimed at Swedish players (eg with Swedish text) = 30% tax.
Example B: Gambling at a casino licensed in Cyprus = 30% tax.
Example C: Gambling at a casino with a license in the European Economic Area that has no focus on Sweden = tax-free.
What about responsible gaming at a casino without Swedish license?
Casinos without a license in Sweden cannot use the responsible gaming tools developed by the Swedish Gambling Authority. Therefore, Swedish players cannot take advantage of self-suspension systems that can assist in case you develop a gambling addiction. As a user, you specify the time you want to switch off games and confirm with e-identification. When done, you are effectively prevented from both logging in and depositing money on gaming sites. Foreign gaming sites are, by definition, considered a casino without this feature.