Audit reveals shortcomings in Swedish gambling authority’s supervision

Garance Limouzy October 22, 2024

A new report from Sweden’s National Audit Office (Riksrevisionen) reveals shortcomings in the Swedish Gambling Authority’s (Spelinspektionen) supervision of the gambling market. The audit reveals several key issues, including an insufficient number of inspections, a lack of follow-up on previously identified issues, and the absence of risk-based planning in their supervisory activities. The report presents a range of recommendations designed to improve the effectiveness of the Gambling Authority’s oversight.

Inspections lagging behind

One of the most significant concerns raised in the audit is the insufficient number of inspections carried out by the Swedish Gambling Authority. Both licensed and unlicensed operators are subject to these inspections, yet according to Sweden’s National Audit Office, far too few are being conducted. Claudia Gardberg Morner (pictured above), Director General of the National Audit Office, stressed the importance of focusing on high-risk forms of gambling, such as online casinos and betting platforms. “It is particularly important to supervise forms of gambling that are associated with great risks. This includes commercial online gambling and betting, which should be controlled much more,” she stated in the report.

The audit also condemns the Swedish Gambling Authority’s failure to target high-risk operators effectively. The report highlights that the agency’s supervisory actions are not always based on a thorough risk analysis. Without this, the authority is unable to focus its resources on the areas that pose the greatest threats to consumers and the integrity of the market, reads the report.

Lack of follow-up on corrective measures

Equally concerning according to Sweden’s National Audit Office is the Swedish Gambling Authority’s limited follow-up on the corrective actions it mandates. Only one follow-up inspection has taken place in the past five years, reveals the audit. This raises doubts about whether identified issues have been adequately resolved, which in turn calls into question the effectiveness of the authority’s entire inspection process. The National Audit Office points out that these shortcomings leave the authority in the dark about whether its efforts are being executed in a cost-efficient manner.

Hedvig Tängdén, the project manager for the audit, stressed the need for better planning and resource allocation. “In this situation, it is particularly important that supervisory resources are used where they are most useful. To succeed in this, the authority needs to base its supervisory planning on a systematic risk analysis,” she explained.

Without regular follow-up, the Gambling Authority has little understanding of whether the operators are addressing the issues that have been identified, leaving gaps in its supervision.

Challenges of enforcing the Gambling Act

Another issue identified in the audit is the unclear scope of the Swedish Gambling Act, which has led to a grey market of operators who operate in legal limbo. This makes enforcement particularly challenging for the Swedish Gambling Authority. The report urges the government to provide clearer guidelines on when a licence is required for online gambling, which would help the authority in cracking down on illegal operations.

“The government should clarify in which cases online gambling requires a licence. This would facilitate supervisory work,” stated Gardberg Morner, adding that this ambiguity has made it harder to regulate the online sector effectively.

Spelinspektionen’s reaction

In response to the report, Camilla Rosenberg, Director General of the Swedish Gambling Authority, acknowledged the findings and pinpointed the steps that have already been taken to address some of the concerns. “We welcome the Swedish National Audit Office’s audit and have carried out ongoing change work since the re-regulation and still have work to do,” Rosenberg said. She added that the past six years have been “intensive,” with new regulations, actors, and legal cases still awaiting resolution in court.

Rosenberg stressed the importance of increased funding, noting that the Gambling Authority has secured additional budget resources for 2024, which will be crucial for expanding and improving its supervisory activities. This funding boost is seen as a vital step in addressing the shortcomings highlighted in the audit.

Recommendations for improvement

The audit concluded with a series of recommendations aimed at both the Swedish Government and the Swedish Gambling Authority to rectify these issues. For the government, the report calls for ensuring that the Gambling Authority has the necessary resources to conduct effective supervision and that reliable information about the scope and results of this supervision is available. The government is also encouraged to investigate the current Gambling Act to clarify when a licence is required for online gambling.

For the Gambling Authority, the recommendations focus on improving the planning and execution of its supervisory activities. The report emphasises the need for a systematic risk analysis to guide the authority’s inspections, urging it to increase the scope and efficiency of its work. Additionally, the Gambling Authority is encouraged to follow up more rigorously on the corrective actions it imposes and to strengthen its organisational capacity to monitor external risks.