Disposable Income and Gambling Expenditure in Sweden: Quarterly Evidence from the Licensed Market, 2019-2025
This study of Sweden's licensed gambling market from 2019 to 2025 reveals that while aggregate real gambling expenditure declined despite rising disposable income due to structural shifts toward online and sports betting, short-term fluctuations in gambling spending remain positively and significantly correlated with changes in household purchasing power.
Original paper licensed under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/). This is an AI-generated explanation of the paper below. It is not written or endorsed by the authors. For technical accuracy, refer to the original paper. Read full disclaimer
Money is the fuel that powers our daily lives, but it also fuels a complex and often risky behavior: gambling. For decades, researchers have wondered how the ebb and flow of household wealth influences the amount of money people spend on games of chance. A key concept in this inquiry is "disposable income," which is simply the money a family has left over after paying taxes and essential bills. This is the actual spending power available for things like entertainment or savings. While it is obvious that wealthier people can afford to gamble more, the deeper question is whether the entire market rises and falls with the general mood of the economy. Does a slight increase in national purchasing power lead to a noticeable jump in gambling, or do people keep their betting habits steady regardless of their bank balance? Understanding this relationship is vital for public health officials and regulators, who need to know if economic downturns might push vulnerable people into financial trouble or if a booming economy simply encourages more spending on entertainment.
In Sweden, a country that completely overhauled its gambling laws in 2019 to create a regulated online market, a researcher named Raphael Mupeta set out to answer these questions using data from 2019 through 2025. The study looked at the total money wagered by players minus the winnings paid out, a figure known as gross gaming revenue, and compared it against the changing value of the average Swedish household's disposable income. The researchers adjusted these numbers for inflation to see the real value of the money, rather than just the face value, and they tracked how the market shifted from physical locations to digital platforms. They also brought in survey data to understand what specific games people were playing, particularly the surge in sports betting. The goal was to see if the rhythm of the economy dictated the rhythm of gambling, even as the way people gambled changed dramatically.
The results revealed a story of two different trends moving in opposite directions. Over the six-year period, the average real disposable income for Swedish households actually grew by 3.1 percent. Yet, when adjusted for inflation, the total amount of money spent on licensed gambling fell by 7.8 percent. This suggests that the market did not simply grow because people had more money; in fact, the overall pie shrank in real terms. However, the composition of that pie changed drastically. The share of gambling happening online rose from 56.4 percent to 65.3 percent, while traditional land-based gambling saw a steep decline. This digital shift was accompanied by a massive rise in sports betting. Surveys showed that the percentage of past-year gamblers who placed a bet on sports jumped from 19 percent in 2024 to 30 percent in 2025. Among those who bet, football was the dominant choice, with 69 percent of bettors choosing it over other sports like horse racing or ice hockey.
Despite the long-term decline in total spending, the study found a clear, short-term link between the economy and gambling. When the researchers looked at year-to-year changes, they discovered that in quarters where household disposable income grew faster, gambling expenditure also tended to grow faster. The data suggested that for every 1 percent increase in the growth rate of real disposable income, the growth rate of gambling spending increased by roughly 1 percent. This relationship held true even when the researchers accounted for the disruptions caused by the pandemic and the general shift toward online platforms. The connection was particularly strong for the online betting and casino sector, where a 1 percent rise in income growth was associated with a nearly 0.8 percent rise in spending growth. This indicates that while the long-term structure of the market is changing, the immediate ability of households to spend money still drives the ups and downs of gambling activity in the short run.
The study also clarified what these numbers do not mean. The researchers emphasized that the total amount of money spent in the market is not a direct measure of harm. A household with a high income might spend a large absolute amount on gambling without suffering financial distress, while a household with very little money might experience severe harm from a much smaller loss. Furthermore, the rise in football betting does not automatically mean that football is the cause of gambling problems. Previous research in Sweden has shown that while sports betting is very common, other forms of gambling, such as slot machines, are more strongly linked to problem gambling behaviors. The study concludes that disposable income acts as a throttle for how much people can spend in the short term, but the digital landscape and the popularity of specific sports like football determine where that spending goes. The findings suggest that regulators and policymakers should watch household purchasing power closely, not just as an economic indicator, but as a signal for how gambling markets might fluctuate in a rapidly digitizing world.
Drowning in papers in your field?
Get daily digests of the most novel papers matching your research keywords — with technical summaries, in your language.