Increased gambling tax
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
S chooses not to reject the tax increase but wants the surplus to be used for welfare and household finances 1. S argues that there is a lack of sufficient consequence analyses of how the increase affects the channeling rate and the consumers 1. C argues that the tax increase hits the horse industry hard and that the profit from ATG decreases by over 200 million annually. C believes that the increase occurred without dialogue with the industry and wants a differentiated tax. SD stands behind the increase to fulfill the gambling regulation and strengthen the state's revenues 2. SD argues that the increase is cautious 2. SD is prepared to review the tax level in the future 3 4. M considers an increased gambling tax reasonable because it finances costs for gambling addiction 5. M argues that the Swedish licensing system has been successful 5 6 7. M wants to avoid differentiated tax due to bureaucracy 5. C considers that the current tax hits the harness racing industry very hard and argues that differentiated tax rates should be considered 8 9. C questions whether dialogue with the horse industry has occurred 8.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Peder Björk (S)
Madam Speaker! The Swedish gambling market was until quite recently a state monopoly. As recently as January 1, 2019, the market was deregulated. Fundamentally, the regulation of the gambling market is based on a licensing system which means that everyone who provides gambling for money or the value of money on the Swedish gambling market shall have a gambling license in Sweden. Furthermore, the intention was that actors without a license should be excluded from the Swedish gambling market.
One of the objectives of today's gambling regulation, as well as part of the goal for gambling policy, is to ensure that the surplus from gambling activities goes to the public and contributes to the financing of state activities. In the budget bill for 2024, the SD government therefore announced that the tax on gambling would be raised from today's 18 percent to 22 percent. Today's debate and matter are a direct consequence of what was presented in the government's budget bill.
Madam Speaker! It is not common for us here in the chamber to debate tax increases proposed by a conservative government. This is simply an exception that confirms the rule. But even conservative governments seem to see a need to strengthen the state's revenues. We Social Democrats, in our budget alternative to the SD government's proposal for 2024, have chosen not to reject the tax change.
However, there is an important and clear difference between us Social Democrats and the SD government, namely in how the increased tax revenues shall be used. When the bourgeois parties, with the Sweden Democrats at the forefront, choose to primarily lower taxes for those with high incomes, we Social Democrats choose to invest in welfare and strengthen household finances. The healthcare crisis that we now see in Sweden is created by the SD government, and Sweden becomes both more dangerous and poorer with the policy that a majority in the Riksdag stands behind and where the Sweden Democrats lead the way.
Madam Speaker! Just as it should be for all taxes, a change in the gambling tax requires careful consideration. In a regulated gambling market, there is a significant risk that a changed gambling tax affects the channeling rate, that is, the proportion of the total gambling on the competitive market that takes place with gambling companies with a license in Sweden.
In previous legislative matters in the area, it has been emphasized that the tax level should be kept at a level that maintains a channeling rate of at least 90 percent. This is not a fixed goal for the gambling policy, but it is well-documented in the preparatory works for the legislation that deregulated the gambling market. The SD government itself points out in the bill on an increased gambling tax that the channeling rate is expected to be negatively affected as a result of players adjusting their behavior to the higher price level.
This needs to be followed up and specifically evaluated. We Social Democrats believe that in the current legislative matter, there is a lack of sufficient underlying data and impact assessments regarding how the channeling rate, and thus the players, are affected by the proposed increase in the gambling tax.
We Social Democrats have on several occasions proposed measures to improve the gambling market and make it safer, for example, requirements for moderation in the marketing of gambling, which have then been rejected by the Sweden Democrats and the government parties. Therefore, Madam Speaker, it becomes particularly important that the change to the gambling tax that we are debating today and will later make a decision on is clearly followed up and that Sweden also in the future has a gambling policy that protects consumers.
Helena Vilhelmsson (C)
Madam Speaker! It is always important to discuss tax increases. One needs to reach an agreement as far as possible. That is, after all, the best way.
However, that is rarely the case. It is not really the case in this instance either. But since it is a proposal that comes from the budget, it is, as I understand it, no party that has submitted any other proposal that is budget-impacting. But there are other things to comment on and follow-up motion on, which I will return to.
I intend to devote my speech to an effect of the tax increase that hits a certain industry very hard: the horse industry. To have a horse, one must exercise it, train it, and compete with it. The horse needs feed, a stable, a trainer, a farrier, and sometimes a veterinarian. There is a demand for services and products that keep Hästsverige going. We have around 350,000 horses, and an enormous sector has grown that provides full-time employment for up to 20,000 people annually.
The gambling company ATG is owned by Svensk Travsport and Svensk Galopp. ATG's surplus accounts for more than 90 percent of the two sports' revenues. The trotting and galloping sports, along with their surrounding activities, receive no other state grants, as other sports do. ATG's surplus also goes out as prize money to horse owners as well as for the maintenance of the country's 33 trotting tracks. The revenues from the gambling are the engine that keeps the trotting sport and the horse industry running, which for the most part is sustained by voluntary efforts otherwise.
This is an industry that is struggling with a long-term recession and increased overhead costs for transport, feed, and energy. Furthermore, a portion of ATG's funds goes to research driven by HNS, Hästnäringens Nationella Stiftelse.
The now proposed gaming tax causes the clouds to gather over the racing sky. It becomes yet another burden. 4 percentage points may not sound like much, but it is a sudden tax increase of over 20 percent. In kronor and öre, it corresponds to a reduction of ATG's contribution to horse sports by over 200 million annually.
There are incredibly many advantages with the horse industry. As I have mentioned, it affects many small business owners in the countryside. The horse is a valuable tool for young people who need help and support for their physical and mental health. Many trotting tracks have some form of open activities for people with ill health. In Mjölby, for example, they collaborate with the trotting track in Mantorp.
The tax from Svenska Spel, the state's gambling company, goes to the state, and the profit as well. It can be shared with associations. But when it comes to ATG, the tax goes to the state, but the profit goes to the industry, which therefore does not get to share in other association grants. This means that if the tax increases, the profit decreases.
How have we ended up here? As you know, it was included in the government's budget bill to raise the tax from 18 to 22 percent. I am quite certain it was done without any dialogue whatsoever with, for example, the industry that it affects so much: the horse industry.
The horse breeding industry has, in hindsight - too late - come forward with proposals for other solutions. For example, the gambling tax on commercial betting could be retained. One could also make a smaller increase and instead increase more on commercial online gaming. How has the government handled that proposal? It has not handled it at all. In this bill, there is nothing about being able to look at, for example, differentiated tax in the future.
A majority of the licensing countries in Europe already have differentiated tax, that is, different tax rates on different gambling products. Most of these have higher tax on online casinos than on betting. One example is the United Kingdom where the gambling tax on casinos is between 15 and 50 percent while the gambling tax on betting is 15 percent.
In this context, one should view the horses as elite athletes and the trot tracks as sports arenas. If this increase in the gambling tax goes through, it will, together with the Swedish Tax Agency's strange handling—which is another issue—where they are conducting almost a hunt on horse companies with the so-called trot VAT—mean that the trotting and galloping industries and, with them, rural enterprises are in danger. That is what the Tidögänget can achieve with this proposal.
Erik Hellsborn (SD)
Madam Speaker! Today we are debating the gaming tax, which is a form of excise tax. This is worth emphasizing as gaming policy and the excise tax have different goals that should be taken into account when proposals are presented.
We in the Sweden Democrats support the committee's proposal for a decision. The proposal means that the excise tax on gambling is increased from 18 to 22 percent of the proceeds for each taxation period. This is important as the purpose of the gambling tax is to fulfill today's gambling regulation.
"The goal is a sound and secure gambling market under public control, which safeguards the revenues for the public and provides good conditions for non-profit activities of public benefit to obtain funding through revenues from gambling. The negative consequences of gambling shall be reduced and there shall be high security in the games. Gambling for money shall be covered by strong consumer protection and not be able to be abused for criminal activity."
Thus is the objective for the gambling policy, which thereby lays the foundation for the proposed increase in the gambling tax. The purpose of an excise tax is to steer consumption and investments in a justifiable direction with regard to public health, environmental benefits, and other effects that are desired to be achieved. This shall not hit Swedish companies or Swedish consumers in an unreasonable way.
The reasons for the increase in the gambling tax are several. One of the purposes of gambling regulation is that the surplus from gambling activities shall contribute to the financing of state activities, which an increase in the tax is expected to do.
A higher tax is also considered to be able to affect the channeling rate, that is, the proportion of gambling activity from companies with a license in Sweden. The Government, together with the Sweden Democrats, wants to avoid a tax that is too high leading to gambling activity being moved to unlicensed actors. Therefore, we have only proposed a cautious increase.
The license investigation concluded in 2015 that a tax of just over 20 percent can be considered compatible with the objective of achieving a channeling rate of at least 90 percent. This has been formulated with caution to avoid an unreasonably negative impact on license-based games in Sweden.
Madam Speaker! With the goals for the points tax and the gambling policy fulfilled, we in the Sweden Democrats support the committee's proposal for an increased gambling tax.
Helena Vilhelmsson (C)
Madam Speaker! I noted down some things that the member said in his speech about that the reform in the long run shall contribute to the population's health being maintained or at least not becoming worse due to gambling and that it shall not affect, for example, companies.
In my speech, I touched upon the effects that the horse breeding companies risk being hit by with this proposal. They are hit financially, quite simply. It can hit very hard, for several reasons - including a cost increase that the low economic climate brought with it. But here it is 200 million on the table that the trotting industry primarily loses out on. I would very much like to hear the member's reflections regarding this.
Has it been included in the assessment that the change primarily affects rural businesses? How do you view that question? Are SD and the government prepared to, for example, look at differentiated gambling tax in the future, or how do you intend to compensate the harness racing industry? I think that is what should be done when such a change comes without being preceded by dialogue. How do you intend to handle the fact that it hits specifically rural businesses?
Erik Hellsborn (SD)
Madam Speaker! Thank you, the member, for many relevant points! In many ways, I agree with what is being put forward. The horse industry is important in Sweden. Trotting is something positive.
I also believe that Sverigedemokraterna and Centerpartiet agree that the total tax burden in Sweden should rather decrease than increase. In this specific case, however, an increase in the gambling tax is assessed to be able to provide funds for necessary state investments without simultaneously having excessively negative effects on the affected sectors. With that said, we will of course keep an eye on the developments and on how the industry is affected. If the effects are found to be too great, Sverigedemokraterna are absolutely not averse to reviewing the tax level in future negotiations.
Helena Vilhelmsson (C)
Madam Speaker! The thing is that ATG does not receive any other state initiatives or grants. Harness racing does not get that. The member is therefore saying that they are ready to review it and that they will compensate harness racing directly. That would be nice because they have been affected so much.
I also wonder if the member can elaborate on what was said about keeping an eye on the development. What we want with our follow-up motion is that, from now on, one should look at whether it is possible to do this in a different way because it was not done previously. It is a proposal in the budget, so there has been no referral process at all, as I understand it.
What we want with our accompanying motion is that, during the half-year that this will apply, it is examined whether it can be done in some other way that involves better effect and better distribution next year. In what way is the member prepared to do that together with the government?
Erik Hellsborn (SD)
Madam Speaker! This shall, of course, be followed up so that we see what the effects will be, just as all political reforms and proposals are followed up. There is a formulation in the proposal that this shall be followed up, even if it may not be as prominent as in the member's proposal.
Of course, we will look at the effects in the future, and if they turn out to be greater than what we have calculated, we will have to rethink. This is not a hill that anyone is prepared to die on, I believe.
Fredrik Ahlstedt (M)
Madam Speaker! Imagine a Swedish living room with a slightly too large thick-tv on an Ikea TV bench. There, English division-1 football is shown with the obligatory trot during the break and after the match. That is how it could look for many of us on a typical Saturday afternoon in the 80s and 90s. There, naturally, Stryktipset for football and V65 for horses had their given place. The preparations during the week before often involved many and long discussions before the right cross ended up in the box and the right stroke was placed on the slip. It created a sense of community and belonging at the workplace, with school friends, or at the seniors' club.
These games were governed by a social control and a limitation in that the whole thing was analog and not available around the clock. Today, gaming is available constantly, around the clock, every day of the year via the high level of digitalization in Swedish society. The possibility to game exists in phones, tablets, and computers - even in our watches now.
Madam Speaker! Games have two sides. That must be kept in mind. On one hand, it is a great and appreciated popular pastime that spreads joy, solidarity, and community. On the other hand, it can be terribly difficult and involve a vulnerable situation for those who fall into gambling addiction and indebtedness.
Many people can play responsibly, but for others, gambling unfortunately leads to major problems. We Moderates therefore believe that it is important that the gambling market is regulated and that society takes a strict stance towards the illegal gambling that unfortunately exists. An increased gambling tax also means that gambling finances a larger portion of the costs that gambling addiction costs society.
Madam Speaker! The introduction of the new Swedish licensing system for gambling has functioned well. In 2018, less than half of all gambling in Sweden was conducted through the channels it was intended to occur through. Already in the Swedish National Audit Office's final report from 2022, it was demonstrated that nearly 90 percent of gambling occurs within the new licensing system. The industry has also had its own reports produced where the channeling rate is repeatedly stated to be just under 80 percent.
It is important to say that there are concerns that the so-called channeling rate, that is, the proportion that plays in the licensed system, has decreased over time. This is also addressed in the bill, and the government writes there that we must closely monitor the development over time. It may not be the exact figure that is most important in this context, but rather that the Swedish licensed system has nevertheless been successful and led to a very large increase in gambling within the framework of the licensed system and the Swedish legislation.
Madam Speaker! The Moderates have pushed the issue regarding the introduction of a licensing system for gambling for a long time, since 2007, and it is gratifying to see that the system is making a difference. Significantly more gambling companies follow Swedish legislation on gambling responsibility and marketing, and as a result, they are under supervision from Swedish authorities. With the good results we have behind us since the new legislation came into place, it is perhaps reasonable that we increase the gambling tax.
For reasons of precaution, the gambling tax was initially set low. The license investigation assessed that a gambling tax of just over 20 percent was compatible with achieving a channeling rate of 90 percent, which in itself may not be a figure set in stone. The previous speaker also pointed this out.
Further regulations to reduce the proportion of illegal and unlicensed gambling have been introduced in recent years. We also intend to intensify that work and see what additional measures may be needed to maintain a high channeling rate. Spelinspektionen has therefore received reinforcements to be able to monitor and prosecute unlicensed gambling.
Madam Speaker! In the debate, a discussion is taking place regarding differentiated gambling tax. For example, there could be a difference between sports betting and online casino games. Sports betting is perhaps slightly more controlled and does not have the rapid outcomes that many online casino games have. This could argue in favor of having a differentiated gambling tax on sports. But on the other hand, we know that different tax rates often create difficult boundary-setting problems and usually lead to increased bureaucracy, which we would prefer to avoid as far as possible. However, there are good reasons to continue this discussion and see what different alternatives could exist moving forward.
The horse industry, which has also been raised here today, is an important part that, among other things, employs approximately 20,000 people. We naturally need to keep track of this and follow the development and see how the horse industry could potentially be affected. The horse industry is an industry that will naturally be affected by the new gambling tax. Therefore, there is also reason to follow this further, just as we write in the bill.
Mr. Speaker! In light of this, the strong development that has occurred regarding the proportion of Swedish-licensed companies and the stabilization that has occurred in the gambling market, an increase of the gambling tax to 22 percent still appears well-considered and reasonable. I hereby move for approval of the committee's proposal.
Helena Vilhelmsson (C)
Mr. Speaker! With the risk of catching the evil eye of the colleagues who are to debate further ahead this evening, I have requested an additional reply in the matter.
I think this is too important not to be highlighted with emphasis. I think, in fact, that it hits the mentioned trotting industry very hard. I have nothing against the principle and what is the background for raising the gambling tax, but I can think that it is a bit sloppy to do it in this way when it has such large effects for an industry that brings so much good to society.
I became a little scared when I heard that about following the development and that something would be done about it if it doesn't turn out well. We have heard that all too many times. We in the committee have heard it when it comes to the internal VAT, for example. It is not as easy to turn back the clock.
I also find it a bit difficult with the argument that it would be unfortunate to have different tax rates because it is so complicated. Yes, it is complicated, but look at what the alternative is! Is it complicated for the Swedish Tax Agency or individual companies, maybe they will still buy it if profitability increases. We already have a VAT system that is incredibly complicated, with a hundred different VAT rates. It is a bit concerning that such emphasis is placed on this in just this specific case.
The chairman also mentioned that higher taxes provide more money to gambling addicts. That is true. But there should also have been a balancing act made. Is gambling addiction as common when it comes to sports betting like trotting as it is when it comes to online games? Otherwise, it becomes skewed.
The committee members are welcome to elaborate a bit on this. But an important question is: Has a dialogue been held with the horse industry at all before this proposal was submitted to the government?
Fredrik Ahlstedt (M)
Mr. Speaker! In the proposition - on page 7, I believe - the government develops quite clearly how it views this regarding the degree of channeling and how important the follow-up is. Reference is also made there to the various referral bodies. Among others, ATG has been a referral body.
It is also clearly written that the Gambling Authority has been tasked to develop a method to calculate the degree of channeling and furthermore to propose any measures to strengthen control in the various areas of the gambling market.
Naturally, a balance must be struck. It must be well-balanced. But we believe that those risks are addressed in the bill. We need to follow up on this, and we need to see how it will hit when we introduce this increase in taxes.
With the other measures that the government is now taking to reduce unlicensed and illegal gambling, it could also be the case that more people enter the system. There are other measures that have been decided earlier, and the Swedish Gambling Authority has also received additional resources to counteract gambling outside the licensed part.
Helena Vilhelmsson (C)
Mr. Speaker! I have also read the bill and learned about the degree of channeling and so on. If I have learned correctly, however, this matter of the degree of channeling does not mean that one should follow it and evaluate it and perhaps come up with new proposals, and thus it per se has no effect on the horse racing industry. That is what one can hardly say. My concern is that it misses the mark with the two large actors we are comparing here, who are affected by the gambling tax.
I wonder: How will the government ensure that this does not actually affect the horse industry in a way that is unfortunate given all the positive effects that the horse industry has, not least for rural businesses? Is the government prepared to look at it over the coming half-year? I really hope that one looks at perhaps redoing this, so that we get a different decision in next year's budget bill.
Is the government prepared to look at differentiated tax rates when it comes to the gambling tax, which is actually what one has in very many European countries? It is also something that the industry itself has proposed.
Fredrik Ahlstedt (M)
Mr. Speaker! One must also see how to move forward with the various discussions. The Government proposes – and I want to emphasize this – that the Swedish Gambling Authority shall receive additional resources to work with statistics and follow-up on the channeling rate. Today, there is no real agreement regarding what is the correct figure when one speaks of the channeling rate. Several different figures are circulating. I believe this is something that is very important to work further on and get in order.
Mr. Speaker! The second part is that if we now see that unlicensed gambling is increasing or has negative consequences, the Gambling Inspectorate has also received resources to do something about it in a completely different way than before. Add to that that the government has previously made decisions on and also proposed to the Riksdag a number of other measures to strengthen the work against illegal and unlicensed gambling, not least linked to the various payment flows. It has been a very important issue to address this.
Then, of course, it is incredibly important that we continue to work with the horse industry and ATG and continue the dialogue and discussion to see how one can work forward, as well as the discussion on differentiated tax. It will certainly continue, and there is every reason to follow it closely.
The deliberation was hereby concluded.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.