The concept of removing discounting from a business model may seem laughable to some, but its implications are worth exploring. In Sweden, the practice has been implemented for seven years, and the results are revealing.
When Sweden reopened its gambling market to licensed competition in 2019, a unique rule was introduced. Operators were allowed to give a player a bonus at the first occasion of gambling, but never again. No reload offers, cashback, or VIP tiers were permitted. The Swedish Gambling Authority has fined operators who got the timing wrong.
The immediate result of this rule is a minimalist welcome package. A typical Swedish welcome package runs to about a hundred kronor, equivalent to eight pounds, plus a handful of free spins. This is the entire lifetime discount budget for a customer who might stay five years and spend much more.
The space left by the coupon has been filled by the product itself. Swedish-licensed online casinos now focus on showcasing their game range, withdrawal terms, and regulator's mark. Retention economics have also shifted, with operators prioritizing payment speed, support response times, and product performance to prevent customer churn.
Brand loyalty has become a crucial factor in Sweden, as customers are more likely to choose a trusted name over a rival. This is a slower and more expensive process than building a coupon-based acquisition strategy, but it's also harder for rivals to replicate.
British businesses are not subject to the same legislative restrictions, but they're facing a similar challenge. Acquisition costs have increased across various consumer categories, and margins have not kept pace. As a result, many businesses are finding it expensive to offer discounts and promotions, leading them to focus on building a strong brand and product.
Sweden's rule has come at a cost, with the regulator's channelisation figure – the share of play that stays with licensed operators – slipping from 86 per cent in 2023 to 84 per cent last year. This highlights the trade-off between promotional freedom and customer retention. For a UK founder looking to understand what a business looks like when it can no longer buy attention, Sweden remains a valuable case study.
