ATG CEO urges Swedish government to lower tax for betting

Hasse Lord Skarplöth, the chief executive officer of Sweden’s leading horse racing authority, AB Trav och Galopp (ATG), has called on the Swedish government to reconsider its recent gambling tax increase, citing lackluster results for the fiscal year 2024.

In analyzing ATG’s financial performance, total revenue for the year ending December 31, 2024, reached SEK 6.19 billion (approximately £459 million, €551 million, or $577 million), representing a modest increase of 2.5% compared to the previous year. However, net gaming revenue saw only a marginal rise of 1.7%, achieving SEK 5.36 billion.

The slight uptick in revenue helped boost operating profit by 1.4%, bringing it to SEK 1.81 billion for the year. When accounting for financial items, pre-tax profit surged to SEK 1.87 billion, reflecting a year-on-year growth of 1.8%.

During ATG’s year-end presentation on February 14, Skarplöth expressed concern that the growth figures could have been significantly higher if not for the gambling tax increase that took effect in July 2024. He attributed the operator’s lackluster revenue performance to a combination of factors, including the ongoing recession, elevated living expenses, and rising interest rates.

A Call for Rethinking the Gambling Tax Structure

This is not the first occasion on which Skarplöth has criticized the revised tax regime. The gambling tax rate, which is determined based on gross gaming revenue (GGR), increased from 18% to 22% in July 2024, facing significant backlash from industry stakeholders. Skarplöth referred to this tax as a “horse tax,” emphasizing its detrimental effect on the earnings of operators reliant on horse racing.

In his presentation of ATG’s fiscal results, Skarplöth urged the government to adopt a more balanced taxation strategy that would safeguard the racing betting sector. He stated, “The increased gambling tax has a negative impact. In my view, this is a horse tax, particularly since ATG contributes approximately 40% of the state’s gambling tax revenue.”

Further advocating for reform, he proposed a tax rate of 18% on betting and 26% for commercial online gambling, arguing that these adjustments would benefit both the government and public health. He affirmed that advocacy for this tax reform would continue into 2025.

In October, a motion was presented in the Swedish parliament, prompting the government to reassess the current gambling tax structure. This motion, introduced by Moderate Party member Carl Nordblom, posited that reducing the tax burden could enhance channelization rates for onshore online operators, thus supporting more competitive practices.

Growth in Sports Betting and Casino Revenues

Despite relatively static numbers in horse betting, which witnessed a 0.5% decline year-on-year to SEK 3.89 billion, both sports betting and casino segments experienced notable growth. Sports betting revenue escalated by 7.8% to SEK 778 million in 2024, largely driven by major events like UEFA Euro 2024 and the Summer Olympics in Paris.

Additionally, the casino segment reported an impressive 8.2% revenue increase to SEK 689 million. This spike was fueled by the introduction of over 600 new games throughout the year, complemented by the launch of the ATG Casino Jackpot in December.

ATG also observed a 7.7% surge in total active customers, reaching 1.4 million, despite the challenging market conditions previously addressed by Skarplöth.

On the expense front, while overall operational costs slightly decreased, the hike in gambling tax resulted in an increase of 13.8% in gaming tax payments, totaling SEK 1.21 billion. After accounting for income tax payments of SEK 386 million, ATG reported a net profit of SEK 1.48 billion, marking a 1.7% increase.

Decline in Horse Betting Revenue in Q4

In examining the final quarter of the year, ATG reported a 3.1% increase in revenue, amounting to SEK 1.65 billion, despite a decline in the horse betting segment. Conversely, both sports betting and casino revenues recorded substantial growth.

Operating costs remained lower; however, the increased tax burden diminished the profit margin. Operating profit rose by 5.1% to SEK 574 million, with pre-tax profit also showing a 5.5% increment to SEK 594 million for the quarter.

After paying SEK 347 million in income tax, the net profit for the quarter amounted to SEK 246 million, representing a year-on-year increase of 9.8%.

In conclusion, Skarplöth expressed optimism for 2025, stating, “My team and I are eager to continue providing exhilarating gaming experiences for our customers while driving revenue growth.”