Sweden Seeks Enhanced Lottery Consumer Protection with Credit Card Ban

Sweden has lately been introducing new measures to make the market safer for everyone involved. The latest move is the country's Finansdepartementet (Swedish Ministry of Finance) proposal to ban credit card transactions for all types of gambling, including lottery games.

This move comes after the Swedish Gambling Authority started issuing new B2B supplier licenses in March 2023. The regulator says this move will prevent gambling sites in Sweden from partnering with unregulated game providers.

The proposal to ban credit cards results from more comprehensive investigations by the Ministry to study risky lending behaviors connected to gambling.

Finansdepartementet recently launched a 650-page report analyzing the consumer credit services currently provided to Swedish residents. The report mainly focuses on evaluating the availability of interest setup costs, interest rate caps, and penalty charges in all types of credit loan services.

Sweden's Gambling Act of 2018 currently prohibits gambling service providers from accepting credit card payments. However, some licensed operators have discovered ways to subtly extend credits through third-party services, thereby breaking the law.

The Swedish Gambling Authority (Spelinspektionen) is on record appealing to the government to amend the country's gambling laws. The regulator claims the current provisions violate market principles if licensees encourage players to take loans to sustain their gambling spending.

The Finansdepartementet report emphasizes that regulated lottery operators are able to sell services to customers through pre-debited invoices because the Gambling Act doesn't enforce a ban on credit cards. These concerns were also recently raised by the Swedish Gaming Market Investigation findings, revealing rampant gambling credits through third-party collaborations.

Svenska Spel, a state-owned online gambling operator, has approved a complete ban on credit card wagering as a preventative step against rising consumer debt. Swedish gambling trade organizations, BOS and SPER, also supported the move.

However, this is just a proposal, as any amendment to the Gambling Act would need a legislative vote. The same move has been successful in some jurisdictions, specifically, the United Kingdom, where the Gambling Commission banned credit card payments in 2020.