ATG Finland JV to offer sports and igaming in regulated market

Strategic Alliance in Finland’s Evolving Gambling Landscape: ATG and Suomen Hippos Join Forces

AB Trav och Galopp (ATG), Sweden’s leading horse racing and gambling authority, has established a strategic joint venture (JV) with the Finnish equestrian organization, Suomen Hippos. This partnership is set against the backdrop of Finland’s impending gambling reforms aimed at liberalizing the online gambling sector.

The newly formed Finnish sportsbook JV, which has yet to be named, will provide a comprehensive array of betting options on sports, horse racing, and online gaming (igaming) for Finns navigating a highly competitive gambling environment. Ownership of the JV will be equally divided, with ATG and Suomen Hippos each holding a 50% stake. Nevertheless, profit distribution is allocated at 40% to ATG and 60% to Suomen Hippos, aligning with the latter’s focus on supporting the racing industry.

This partnership arrives as Finland’s parliament deliberates a transformative gambling reform bill, anticipated to gain approval by summer. If enacted, the legislation will grant private operators access to Finland’s online gambling market beginning in January 2027, significantly altering the landscape of the local industry.

Under the proposed framework, Veikkaus will retain its monopoly over lotteries, scratchcards, and physical gaming machines while private entities will be permitted to offer online betting, casino games, and horse racing—an addition that surfaced during the bill’s discussions in November.

The JV’s headquarters will be established in Helsinki, with a strategic aim to reinforce and invigorate the Finnish racing industry. Notably, up to 60% of profits generated through the joint venture are earmarked for reinvestment in the racing sector, promoting its sustainability and growth.

“We believe that our new joint Finnish company provides us with the prime opportunity to actively and responsibly influence the future of the horse industry,” stated Minna Mäenpää, CEO of Suomen Hippos, in a released statement on April 1st. “Collaborative Nordic trotting initiatives are increasingly vital, and this partnership enhances our capacity to foster the development of both the sport and the equine industry’s operational frameworks.”

ATG and Suomen Hippos Joint Venture: Equestrian Dividends

According to ATG’s manager of Finnish operations, Mikael Bäcke, the formation of this joint venture represents a critical investment for the group. “As the betting licensing landscape evolves, the future of Finnish horse breeding and trotting will benefit from equitable allocations of betting revenue, with both Veikkaus and our newly formed betting company sharing in the profits through agreements governing data and imagery,” Bäcke noted.

Finland’s Gambling Reform: A Catalyst for Competition

The forthcoming gambling reforms in Finland are set to position Veikkaus directly against a wave of private operators, including the newly established sportsbook joint venture. This change will permit Veikkaus to maintain its retail gaming slots and lottery operations while simultaneously launching a competing business unit aimed at mitigating its market share decline.

Veikkaus has faced challenges recently, evidenced by a decline in profitability highlighted in its H1 2023 earnings report released on September 2nd. Group Managing Director Olli Sarekoski commented on the underwhelming profit margins, which reflected a broader trend of decreasing revenues.

In Veikkaus’ full-year results for 2024, published on March 5th, the company reported a 7.3% decrease in sales revenue year-on-year, totaling €956.2 million (approximately $1.02 billion/£800.1 million). A significant contributing factor to this downturn is the growing prevalence of illegal gambling platforms and overseas operators. Data from H2 Gambling Capital suggests that Finnish consumers spent around €550 million on unauthorized gaming activities in 2024.

This joint venture and the expected reforms signal a pivotal shift in the Finnish gambling landscape, marking a move towards increased competition and innovation in the sector. Stakeholders in the gaming industry will need to stay attuned to these developments as they unfold, ensuring they harness the potential opportunities presented by this dynamic environment.