Kindred chief makes case for a lower Swedish tax rate

The Swedish government must lower its proposed 18% tax rate if the soon-to-be liberalised market is to outperform its channelisation target, according to Kindred Group chief executive Henrik Tjärnström.

Speaking to EGR Intel this morning, Tjärnström described recommendations submitted by a recent government inquiry as a “step in the right direction” but believed its current 90% channelisation target, to be achieved within two years, should be set higher.

The figure was based on a proposed 18% tax on gross gaming revenue (GGR) as part of the country’s move towards a liberalised multi-vertical online gambling market, which if adopted could see a licensing process begin as early as next year.

“It [the report’s 90% proposal] is a step in the right direction but I’d say it should be even better,” Tjärnström said.

“We think it should be more like 95% to make sure that we really seize the opportunity to come in with the strongest position possible from a channelisation point of view in the market,” he added.

Tjärnström says a 15% tax on GGR would lead to higher channelisation in Sweden

To achieve this, Tjärnström said Kindred had been urging the Swedish government to take lessons from the UK market, which has a 15% levy and approximately 95% of customers playing within the regulated environment.

“If you want to get to 95%, where it is in the UK, which is an open and mature market, then a 15% tax on GGR is where it needs to be,” Tjärnström added.

“Denmark, for example, has got a 20% tax and channelisation is at around 85% there – so there is clearly a strong correlation between the two.”

The recent 1,340-page report into re-regulation comes after the government set-up an investigation board to look at the re-regulation of the market back in 2014.

Tjärnström was speaking to EGR Intel following the release of Kindred’s Q1 results.