‘Shadow play’ threat to lotteries

‘Shadow play’ is a threat to state-owned and good-causes lotteries, says Svenska Spel.

Shadow play, or betting on the outcome of another game company lottery, is the subject of a new report indicating that this type of game, operated by shadow companies, has nearly 40 per cent of the European online lottery market.

The authority says that its own lottery, and others dedicated to charities, have generated a large surplus to Swedish society. “The companies that offer ‘secondary lotteries’ have no licence and conducts no draws of their own. Instead they take advantage of the loopholes in gaming law.”

It points out that shadow play companies are not only providing Swedish consumers with gambling on lotteries such as the Powerball and Euromillions, but also on the lotteries in neighbouring Norway and Finland.

“If this trend continues then the funding of sports associations and charities will be affected; those non-profit organisations that receive part of their revenues from public lotteries, will be affected,” said Svenska Spel president and CEO Patrik Hofbauer.

A report from research company H2 Gambling Capital, funded by Svenska Spel, estimates that the shadow games companies now account for nearly 40 per cent of the European online lottery market and their GGR can be estimated at €1.25-1.5bn in 2019. The report suggests that those companies are expanding by 10 per cent -20 per cent annually.

“Unless the lawmakers act, the income for charities will go downhill fast. The risk was seen early in Denmark, which has moved to ban betting on lotteries with companies not currently holding a Danish licence. We should impose the same ban in Sweden,” said Hofbauer.