Swedish Gaming Board Reports Print Editors to Police for Foreign Betting Ads

Last week Sweden's National Gaming Board reported four of the country's print-based editors to police for the violation of running advertisements for foreign gambling companies.

Two newspapers, Expressen and Metro, and two magazines, Slitz and Spray, ran ads for non-Swedish gambling companies in the weeks leading up to the World Cup. Expressen's sports section alone reportedly had seven advertisements for foreign gambling companies on Thursday.

Sweden's Lotteries Act of 1994 expressly prohibits the promotion of unlawful gambling that originates outside of the country. According to chapter 38 of the Act, it is illegal for foreign gambling companies to solicit customers through advertisements in the Swedish media, thus making it illegal for Swedish media outlets to accept such advertisements. It is legal, however, only for state-owned gambling companies such as Svenska Spel to advertise.

These aren't the first cases of illegal gambling advertising in Sweden. A number of district court rulings have upheld the law.

Among those already found in district court judgments to have broken the law are Expressen editor Otto Sjöberg and Nerikes Allehanda editor Krister Linnér, who was refused an appeal by the Swedish Supreme Court.

"This means that doubt is now eradicated," said the Gaming Board's chief legal officer Håkan Hallstedt. "The law applies and we can act more forcefully."

But the editors in question are arguing that the Swedish law is inconsistent with EU law.

In recent months Sweden and six other EU states have been in the spotlight for upholding regulations that sustain monopolies for state-owned gambling operators. The European Commission in April sent official inquiries into the restrictions on sports betting services to seven Member States, including Denmark, Finland, Germany, Hungary, Italy, the Netherlands and Sweden, in order to determine whether the restrictions violate Article 49 of the EC Treaty, which guarantees the free movement of services.

EU law says that countries may prevent competition in the gambling space in order to maintain social safety but that they must otherwise uphold free and fair competition.

Ulf Isaksson, a partner at Danowsky and Partners in Stockholm, is representing Sjöberg, the editor of Expressen who awaits appeal in one of the earlier cases of illegal advertisement. While Isaksson could not give specifics about his client's case, he shared his opinion about the current state of affairs in Sweden regarding gambling and fair competition.

"As the Swedish National Gaming Board has launched a number of actions against editors and newspapers for advertising foreign lotteries, Swedish national lottery legislation is constantly being challenged from many directions," Isaksson said. "In January 2006, a Swedish legislative commission expressed doubts on Swedish laws' conformity with EC law. In addition, new gambling cases are currently pending before the European Court of Justice. The final outcome of these matters is not certain, but many are convinced that the current Swedish legislation infringes EC law and think that the national courts will eventually share this view, although such step may require a judgment by the European Court of Justice."

This isn't the first time the Swedish gambling monopoly and advertising law has been challenged. British bookmaker Ladbrokes in 2004 launched an Internet scratch card called Trippel to compete with Svenska Spel's identical product, Triss. Ladbrokes placed an ad for Trippel in Swedish newspaper Aftonbladet, and the Gaming Board promptly reported it to the police.

In April of this year, Ladbrokes further challenged the law by applying for a license to operate Ladbrokes Poker in Sweden.