Swedish don’t identity black platforms, high VAT in Colombia, Karnataka creates regulation
Swedish survey shows players can’t differentiate between licensed and unlicensed platforms, Colombia’s new VAT hits total GGR, and the Indian state of Karnataka is developing new regulations.
Swedish players can’t identify black market platforms
Since re-regulating in 2019, Sweden has struggled with channelization, despite the country’s high rate of gambling participation.
The likely culprit is the tight restriction on bonuses that domestic operators can offer — only a single welcome bonus for each new player. Brands are allowed to advertise, however, unlike those in several other markets, like Belgium and Italy.
However, Sweden does have one curious statistic in common with Belgium. In one report issued by the Belgian Association of Gaming Operators, 50% of Belgian men aged 18-21 visited black market sites, and 29% gave the name of an unlicensed platform when asked to name a gambling brand.
Now, according to a survey commissioned by Swedish regulator Spelinspektionen, a shocking 72% of Swedish players were unable to distinguish between licensed and unlicensed betting products. This is despite the fact that 42% of respondents to the survey agreed that having a local license was important for an online gambling operator.
Overall channelization rates in Sweden vary over time, most recently from 69% to 82% during 2024 Q4, according to numbers from horserace operator ATG. However, they’ve never hit the government’s target of 90%.
Countries often struggle with channelization rates when overbearing restrictions make it difficult for licensed operators to compete with unlicensed ones. Typically, the main culprit is a ban on advertising, which lowers public awareness of which brands are legal and which aren’t, but other restrictions, such as bonus and wagering limits, can hamper operators’ ability to bring players in.
Colombia VAT flattens GGR
Colombia may be LatAm’s regional leader in terms of regulation, but it might be — very unfortunately — following another market’s bad example.
In February, the government of Colombia introduced a 19% VAT on online betting deposits. Fecoljuegoes, the Colombian Federation of Gambling Entrepreneurs, immediately responded by pointing out that the tax would lead to operators pulling out of the market.
The insight was backed up by recent history, albeit in another market and on another continent; in 2019, authorities in Kenya implemented a sizable turnover tax, leading to an extended back-and-forth between gambling companies and the government that ultimately ended with some brands pulling out of the market completely.
While that isn’t quite playing out in Colombia (yet), the VAT has had an immediate impact: online GGR has dropped by a whopping 30%. Some operators have already tried to find ways around the tax. Stake, for example, started issuing bonuses to try and soften the blow for players, though Fecoljuegos chief Evert Montero has admitted in an interview that this strategy simply isn’t sustainable in the long term.
The tax is immediately levied from deposits, so players can plainly see their $100 deposit shrink to $84. As a result, platforms in the country are recording drops of up to 50% in KPIs such as deposits and average deposit per player.
Aside from the aforementioned disruptions that can be caused by excessive taxation, another common outcome is that players could easily flock to black market sites, as is often the case when confronted with unfavorable conditions in the domestic market.
Karnataka looks forward to new regulations
India’s state-by-state approach to gambling regulations means some doors are open while others are closed, but operators should have another key in their hands sometime soon.
Ministers in the state of Karnataka have confirmed that a committee of senior officials and industry representatives are working on a draft bill, expected to soon be submitted.
The proposed regulatory model would be based on that of the state of Chhattisgarh, which differentiates between games of skill and games of chance.
According to Information Technology and Biotechnology Minister Priyank Kharge, the country’s skill-based gaming sector is worth $4 billion, generates $1.44 billion in taxes and supports over 150,000 jobs, with Karnataka accounting for 25% of the market.
The Karnataka Police Act was amended in 2021 to ban online games, though that ban was later struck down by the high court. The new law is an effort to clarify regulations, protect consumers, and combat the black market.
