n the past, the Moderate party has followed the line of Sweden's finance minister, Anders Borg, who has been in favour of privatising some state-owned business, but who had ruled out privatization of the gambling monopoly.
At the party conference on Saturday, Tomas Tobé MP told delegates that the way forward was to abolish the current monopoly and open the Swedish market to competition through a licensing system, which would result in the sale of the state's gambling assets such as Svenska Spel and ATG.
As a counter balance, support should be given to researching problem gambling and establishing effective controls to minimise its risk. Following his speech, the proposal to abolish the state gambling monopoly was put to a vote by members of the party and was passed by a majority vote.
Speaking to Gaming Intelligence Group at the close of the party conference, Tobé said that the decision was an important one which would now facilitate a discussion between the ruling parties as well as between the state and foreign gaming companies.
“By December 2008, an in-depth report on the gambling market will be released following an investigation by Jan Nyrén, legal counsel of the police authority, but the party congress did not want to wait for this and voted for change to take place more rapidly” he said.
Four political parties together make up Sweden's ruling coalition government, the Moderate's, Centre party, Peoples party, and the Christian Democrats. All but the Christian Democrats have now publicly supported ending Sweden's gambling monopoly.
Tobé also said that with the European Commission monitoring Sweden's activities with regard to the provisions of the EC Treaty, it would be preferable that the government took steps to address the issue of its own accord, as opposed to being compelled to do so by a ruling from the European Court of Justice.
While there is still a long way to go, with many details to be negotiated, Tobé expects that a licensing system will be introduced in Sweden, although it is too early to say how many licenses might be made available. What is clear is that any companies wanting to operate in Sweden will need to abide by strict marketing laws and accept Swedish tax rules. “We are open to discussions with the gaming companies in order to establish an effective method of taxation rather than a broad turnover based approach,” he said.
Once the gambling market is opened to competition, Svenska Spel is expected to be privatised to enable the company to compete more effectively in the market either through a stock market listing, or via a sale to another operator, although the latter is most unlikely.
In 2006, Svenska Spel generated a profit of 523 million euros and contributed more than us$ 156.9 million to sports and youth programs. The company currently accounts for approximately 55 percent of the Swedish gaming market with an annual turnover of 2.2 billion euros.
If Svenska Spel were to be valued using a similar P/E ratio to its publicly listed competitors, the company could be valued at roughly 7.05 billion euros, almost double the size of Ladbrokes Plc.