Swedish online poker monopoly could stay

The giant Swedish government gambling monopoly Svenske Spel, which has proved a formidable opponent in the Scandinavian online poker sector, could continue to pose a threat despite the possibility of European Union action to liberate the flow of goods and services in the member nation.

Scandinavian reports indicate that the Swedish finance minister, Anders Borg, may take his lead from UK Chancellor Gordon Brown in using high tax rates and stringent regulations to discourage competing companies from entering the Swedish market, thus officially curtailing the monopoly but discouraging replacements.

One of the election promises of the Swedish alliance of middle and right-wing political parties last year was to abolish the state gambling monopoly.

Veckans Affärer, a Swedish business publication reported this week that it has received information indicating that Svenska Spel will be allowed to maintain its monopoly, primarily due to the significant revenues that it generates for the state. In the first quarter of 2007, Svenska Spel recorded a net profit of Euros 157 million from revenues of Euro 260 million.

The report goes on to suggest that the Swedish finance ministry is currently working on a licensing and taxation regime so tough as to deter all but the most determined foreign competitor.

In order to placate the EU, Svenske Spel may be compelled by government to cut marketing activity significantly and restrict new games development, at the same time improving on compliance technology.

The timing is right for a statement by the minister - this week marks the end of a two month EU deadline for countries like Denmark, Finland and Hungary to modify their gambling legislation or face possible litigation in the European Court of Justice.