Swedish gambling tax hike hits ATG’s Q3 results

The horse racing betting operator described it as a challenging quarter.

Sweden.- AB Trav och Galopp (ATG) has reported revenue of SEK1.29bn (€112.6m) for Q3. That’s a drop of 4.7 per cent year-on-year. Meanwhile, profit was down by 19 per cent owing to the increase in gambling tax in Sweden, which was raised from 18 to 22 per cent of gross gambling revenue from July 1.

Revenue from Swedish and Danish horse betting was down 6.5 per cent, partly due to there being one less Saturday in the month this year but also due to competition from big sporting events like the Olympics. Indeed, sports betting revenue was up by 1.3 per cent year-on-year while casino revenue remained flat.

Commenting on the results, ATG CEO Hasse Lord Skarplöth said it had been a “challenging” quarter but again criticised the increase in gambling tax, which he has dubbed a ‘horse tax’. He’s been calling for a differentiated tax rate for betting on horses and for the increase to apply to online casino gaming only.

He said: “I’ve said it before – the increased gambling tax is a horse tax. ATG accounts for approximately 40 per cent of the new tax revenue from the gaming industry. The tax increase affects our surplus to our owners, Svensk Travsport and Svensk Gallop, and thus the entire Swedish horse racing industry. That could not possibly have been the purpose of the increased tax rate.

“ATG has worked hard to reduce costs in order to improve results. Excluding the tax change, the period’s operating profit and operating margin improved compared to last year.”

Earlier in the month, it was reported that the Swedish parliament would evaluate a proposal to lower the new tax rate on gross gambling revenue following a proposal from Moderate Party MP Carl Nordblom. Gambling tax was increased from 18 to 22 per cent from July 1 in a bid to generate an extra SEK500m in annual tax revenue for the government.

Nordblom argues that rowing back on the tax hike could improve channelisation to licensed online gambling operators. The motion comes as the Swedish gambling regulator published its 2023 report, which estimates channelisation for last year to have been 77 per cent.

Published on October 2, Nordblom’s motion reads: “The majority of operators have warned that the degree of channelisation, the level of gambling that takes place in the Swedish licensed gaming market, is decreasing. The consequence of this is that Swedish players turn to foreign gambling companies without a Swedish gambling licence.”