Recent legislative developments in Sweden are set to significantly impact gambling operators and service providers. This article outlines two proposed major changes: an expansion of the territorial scope of the Swedish Gambling Act (“SGA”) through the introduction of a participation criterion, expected to take effect on 1 January 2027, and an extended ban on gambling on credit, expected to enter into force on 1 April 2026.

These developments follow increased regulatory scrutiny of the Swedish gambling sector, including recent enforcement actions against B2B software providers.

Expansion of the territorial scope of the Swedish Gambling Act

Background and current regime

The SGA currently applies a so-called direction criterion, meaning that it applies to gambling operators that direct their operations to Sweden. Indicators of direction referenced in the preparatory works of the SGA include offering games accessible from Sweden, designing websites for the Swedish market, using Swedish text, or offering deposits and winnings in Swedish currency.

However, according to the Swedish Gambling Authority (“GA”), these traditional indicators have become less relevant as operators have found alternative ways to target Swedish consumers whilst avoiding the obvious markers of direction. This requires the GA to assess a broader range of factors such as marketing channels and payment methods, creating significant interpretative challenges and allowing foreign-based operators to provide gambling to Swedish consumers in a regulatory grey area. 

Proposed participation criterion

To address these challenges, the Swedish Ministry of Finance proposed in its memorandum Ds 2025:23 ("Memorandum"), published on 24 September 2025, to replace the direction criterion with a participation criterion. Under this approach, gambling services will be considered to be provided in Sweden - and thus fall within the scope of the SGA - if individuals located in Sweden can participate, regardless of whether the services are explicitly directed to the Swedish market.

The participation criterion is not intended to require all foreign-based online gambling operators to apply for a Swedish licence. Instead, operators that wish to operate without a Swedish licence must take active measures to prevent individuals in Sweden from participating, for example through geo-blocking. The Memorandum emphasizes that the measures undertaken to restrict participation from Sweden must be serious and must not be opposed by the operator itself, for example through marketing aimed at Swedish consumers or by providing instructions on how players can bypass a website block.

The proposed change is further intended to provide greater clarity for other actors in the gambling ecosystem, such as payment service providers and gambling software providers, making it easier to determine whether their collaborations with online gambling operators are permitted under the SGA.

Expanded criminal liability

As a consequence of the proposed expansion of the territorial scope, the scope of criminal liability for illegal or unlicensed gambling will also be expanded. A new condition is introduced whereby criminal liability will apply if someone located in Sweden has participated in an unlicensed game, even if the gambling service is not directed to Sweden.

Liability requires intention or gross negligence and may result in a fine or imprisonment for a maximum of two years. Small-scale operations and low-value transactions will remain exempt. 

Expanded liability for promotion

The scope of liability for promotion of illegal or unlicensed gambling will also be expanded, according to the proposal. The amendment clarifies that the prohibited action is to promote to consumers in Sweden to participate in illegal gambling or gambling provided without the necessary licence. 

The promotion ban will be extended to the provision of payment solutions and other financial or administrative services to gambling operators. Provision of such services may constitute promotion regardless of whether the service has been developed specifically for gambling companies, provided that the service provider has had knowledge that the service will be used to facilitate illegal gambling in Sweden.

Timeline and next steps

The amendments are proposed to enter into force on 1 January 2027. The memorandum is currently in the consultation phase, and changes may be made during the legislative process before the proposal is submitted to Parliament.

Extended ban on gambling on credit

Current regime

The SGA currently prohibits licensed gambling operators and gambling agents from offering or providing credit for gambling bets. However, this ban does not prevent operators from enabling players to use third-party credit, such as credit cards, mobile phone billing, or external lending services.

Proposed expansion

On 30 September 2025, the Swedish government adopted a legislative proposal (Prop. 2025/26:11) introducing a comprehensive ban on gambling financed by credit in any form. The proposal will apply to all forms of licensed gambling (both online and land-based), covering licensed operators and gambling agents, and will extend to the facilitation of third-party credit arrangements. It aims to reduce gambling-related debt and strengthen consumer protection and is expected to enter into force on 1 April 2026.

Operators will be required to take appropriate and proportionate measures to prevent gambling being financed with credit. This includes blocking credit card payments for gambling, refusing transactions where the operator knows or should know that credit is being used, and not facilitating third-party credit through linking to external lenders, referrals to credit providers, or enabling payment via mobile phone bills. 

Operators must also implement technical and organisational measures to identify credit-based transactions. These measures must be appropriate and proportionate, meaning that the cost of implementation should be reasonable in relation to the expected impact. The Swedish government acknowledges there are technical limitations in identifying all forms of credit. However, where the operator receives or observes relevant information indicating credit use—for example through customer interactions, account monitoring, duty of care assessments (Sw: omsorgsplikt), anti-money laundering procedures, or direct player disclosures—the operator is obliged to refuse the transaction.

The GA may grant exemptions from the credit ban for certain public benefit lotteries where the total credit amount does not exceed a specified threshold. The current exemption for political party lotteries will be removed.

Preparing for compliance

To ensure compliance with the expected credit ban, we recommend gambling operators to audit current payment methods to identify and block credit-based options, implement technical blocks on credit card payments, and train staff to recognise and respond to credit-based transactions. Operators shall also update consumer-facing materials to include warnings about gambling with credit and review contracts and partnerships to ensure no facilitation of third-party credit.