Unlicensed gambling in Sweden has continued to grow. Tighter regulations may not be having the impact the government desires, instead driving people offshore.

January 2027 will see the introduction of a new law in Sweden, which targets the location of a player using online gambling services. This will counteract a loophole, which it is believed is facilitating rapidly falling channelisation rates in the country. It will be supported by the Swedish Trade Association for Online Gambling, though warnings have been made about how it will have little impact if overregulation burdens current operators.

Growth in Unlicensed Gambling Among Swedish Players

A report from April of last year by the Swedish Gambling Authority looked at 1,100 unlicensed gambling sites. It is estimated that 65% of this traffic was covered by active oversight. It placed unlicensed operators under three categories. These were totally unregulated entities, those regulated in other EU countries, such as Malta, and those regulated elsewhere in the world, such as Curaçao.

The report broke users down into categories. These were people who did so without knowing they were at unlicensed operators, underage gamblers, those registered with the Swedish gambling exclusion system and lastly those looking for sites with fewer restrictions. It showed that traffic to unlicensed operators, or those licensed in Sweden, was still extremely high.

ATG runs horse racing betting in the country. Its CEO, Hasse Lord Skarplöth, noted that “It is unreasonable that such a large proportion of gambling still takes place outside the licensing system. Unlicensed gambling is a breeding ground for money laundering, but above all, Swedish players are without protection from rogue operators. The annual turnover of unlicensed gambling is almost as much as the entire Swedish primary school costs.”

As Sweden moves toward 2026, the gambling market faces a clear imbalance where stricter regulation improves consumer protection but also pushes some players toward offshore alternatives, making it increasingly important for users to understand their legal and safer options when choosing among the best casino sites in Sweden operating under the national licensing framework.

Improved but Insufficient Channelisation Rates

In Q4 of 2024, the channelisation rate was around 69% and 82%. This was way below the 90% target the country had set out in 2019, when Sweden introduced its regulated market. This was only a marginal increase from the 70% and 82% suggested the year before. In 2023, it had stood at 86%, meaning 14% of gambling took place outside the regulated system.

The industry itself believes that strict oversight will continue to contribute to this volatility in the channelisation rates. Their logic is that blocks, bans, and higher costs will do little if offshore regulators are able to offer better services. This requires a change in attitude, making Swedish licensed operators more competitive and providing the regulatory framework that allows them to do so.

Taxation is a huge balancing act here. In 2024, the gambling tax rose from 18% to 22%. The Swedish Trade Association for Gambling has noted that higher taxes will lead to differences in quality between licensed and unlicensed operators as costs cut into companies’ profits.

For operators to be illegal in Sweden, they must fall within the “targeting criterion”. This gets complicated because sites which are accessible from Sweden are not automatically deemed illegal. Instead, they must target their services directly at the Swedish market. For example, a website in the Philippines written in English and serving European customers is not illegal. Yet if they add Swedish customer service and begin advertising in Sweden, they are.

This makes for an interesting loophole. There are licensed operators, unlicensed operators that are still technically legal, and then ones which are both illegal and unlicensed. This data then becomes even harder to quantify when you consider that many Swedish players speak and read English, and have bank accounts that operate in Euros.

The Continuing Challenges for Licensed Operators

One challenge is that many illegal gambling sites use the same platform providers as licensed ones. Research from Aktiebolaget Trav och Galopp (ATG) has suggested this could be as high as 17 out of 20 platforms. This makes it extremely hard to push the narrative that, in terms of UX, design and games, legalised operators are providing a much better service.

A further debate on taxation is also ongoing regarding the splitting of taxes. ATG wants to split this by product. This would provide a different rate for sports betting than for online casino gaming. This is being opposed by others, who believe that it would push players further offshore.

Advertising is another issue that must be addressed. Svenska Spel is the state-owned operator, and has been accused of giving itself an advantage, especially when it comes to an 18-point plan it has suggested regarding the advertising of gambling products. Further restrictions on advertising are being given as another regulation that could burden domestic operators.