Sweden’s skin betting surge raises concerns

A recent report from the Swedish Gambling Authority (Spelinspektionen) has shed light on the growing prevalence of skin betting in Sweden, a practice that is increasingly popular among younger users and poses significant regulatory challenges.

Skin betting involves using virtual items, known as ‘skins’, as stakes or prizes in gambling activities. These items, often tied to online games, can hold real-world monetary value, making them a lucrative but controversial form of wagering.

The report reveals that skin betting accounted for 49% of traffic to unlicensed gambling sites in Sweden in 2023, dropping slightly to 41% in 2024. Alarmingly, six of the ten most-visited unlicensed gambling platforms in Sweden last year were skin betting sites.

These platforms often operate without proper gambling licenses and lack robust age verification measures, exposing minors to gambling risks.

Spelinspektionen noted that some unlicensed websites offering traditional casino games have started accepting skins as deposits, a move that blurs the lines between conventional online gambling and skin betting.

Many of these operators are based outside Sweden, including jurisdictions within the EU and offshore locations like Curacao, which account for a significant portion of unlicensed traffic.

The accessibility of these platforms has raised concerns about their impact on Swedish consumers, especially younger demographics.

Despite efforts by Spelinspektionen to block transactions and issue prohibition orders, skin betting sites continue to thrive, often leveraging influencers and streamers on platforms like Twitch to attract users.

The report calls for stricter regulations to combat the issue and suggests shifting from a direction-based model, focused on whether operators explicitly target Swedish consumers, to a participation-based framework that encompasses all gambling activity involving Swedish players.

As Sweden reviews its Gambling Act, policymakers face mounting pressure to address this growing black market trend and protect vulnerable users from its risks.