STOCKHOLM (Reuters) - Sweden’s government proposed on Thursday that the state gambling monopoly largely be replaced by a licensing system as it looks to rein in overseas-based online gambling that has surged in recent years.

The rise of online betting has gradually eroded the monopoly, established in 1934, with other companies able to operate easily inside Sweden from abroad with online betting.

With the new legislation, the center-left government aims to bring foreign-based online gambling companies such as Kindred Group and Betsson, which operate from outside Sweden, under its regulatory sway.

Online gambling firms will pay an 18 percent tax on gross gaming revenue if the proposal passes parliament, the government said in a statement. The proposal was largely in line with a government study unveiled last year.

“The now proposed gambling legislation means that anyone active in the Swedish gambling market should do so with a valid license and that actors without licenses will be shut out,” the statement said.

Several of the larger online betting firms have previously said they are largely positive to the regulatory changes.

Swedish Public Administration Minister Ardalan Shekarabi told a news conference the legislation would make it a crime to promote unlicensed gambling, for instance by advertising, while payments between unlicensed firms and gamblers could be blocked.

Some types of gambling, such as the handful of state-run casinos operating in Sweden, would remain monopolies. The legislation is proposed to come into force from the turn of the year if approved by parliament.

https://www.reuters.com/article/us-sweden-tax-gambling/sweden-proposes-licensed-gambling-largely-scrapping-monopoly-idUSKCN1HC17Y