Towards an emerging global gaming-market Strategic opportunities for the Swedish state-licensed gaming companies

Abstract

State licensed monopolies backed by restrictive national legislations has for a long time dominated the European gaming market (Zoer, 2004), these gaming monopolies has prevailed over all criticism from the European Union for some time now. However, at this time these state licensed monopolies are starting to disperse and Europe might stand in front of a far reaching liberalization of its gaming market (Scott, 2004). The deregulation and liberalization of gaming laws is a real threat to casino, betting and lottery companies. The most recent court decisions of the European Court of Justice and national courts tend towards an increased liberalization of the European gaming market (Olson, 2003). The Swedish gaming and lottery market is strictly regulated, and the government has decided that only certain explicitly chosen actors are allowed to operate in these markets. The Swedish gaming monopoly is not likely to disperse entirely or immediately but the present form of governmental monopolies is not likely to sustain (Fransson et al., 2004). A new market is slowly emerging, a global gaming market (Europe Economics 2004). The scope of the study was to find suitable corporate strategies for the Swedish state-licensed monopoly companies - AB Svenska Spel; AB Trav & Galopp and Folkspel - in case of liberalization or deregulation of the Swedish gaming monopoly. The study was conducted as a prognostic study divided into six steps (1) Study phenomena on emerging markets and globalization of markets, (2) Mapping trends and characteristics of the worldwide wide gaming market; primarily US, (3) Study the Swedish gaming market, (4) Analyzing characteristics of the emerging global gaming market (Prognostic), (5) Analyzing characteristics of the Swedish market (Prognostic), and (6) Analyzing the strategic opportunities for the state-licensed corporations on the emerging market (Scenario). This study show that the strategic opportunities for the Swedish state-licensed companies on a general level look quite positive, but some restructuring will be needed in order to successfully meet global competition and to protect the weaknesses of the Swedish state-licensed companies. The licensed actors in Sweden possess domestic strengths in especially the areas of trotting, horse racing, games of chance, slot machines and bingo. Their weaknesses are generally their small size and their inferior financial strength, at least when compared to the larger global actors. The Swedish casino division is an orphan in comparison to the global actors and is hence the weakest point in the value-chain of the Swedish state licensed gaming companies. This study has revealed opportunities that could enhance competition for the Swedish actors in case of a deregulation or liberalization of the Swedish gaming market. This study has not revealed what has to be done, but rather gives a presentation of the strategic opportunities that are exposed by analyzing the emerging global gaming market. However, the current interest for the topic, described in this thesis, and the many signs pointing towards a deregulation, should be reason enough for the Swedish actors to sit down and evaluate their opportunities in a future globalized gaming market, while “Alea iacta est” (Ceasar, 49BC) - The die is cast.