Swedish government loosens grip on ATG in new agreement
Swedish Government Redefines Its Role in Racing Monopoly ATG with New Agreement
The Swedish government is transitioning its control over the racing monopoly, ATG (Aktiebolaget Trav och Galopp), under a new comprehensive agreement that mandates full independence for its board members. This strategic move reflects the government’s intent to streamline regulations within the gambling sector while promoting a more autonomous operational framework for ATG.
Announced on April 10, the agreement emerged from discussions between the Swedish government, Svensk Travsport, and Svensk Galopp, both of which hold ownership stakes in ATG. This significant policy shift marks a departure from the historical government oversight that has characterized ATG since its inception.
The Origins and Evolution of ATG
Established in 1974, ATG was originally created to address pressing financial challenges within Sweden’s equestrian sports community, particularly addressing the fiscal troubles faced by Svensk Travsport and Svensk Galopp. The government facilitated this joint venture for horse betting, with profits earmarked to support trotting and galloping sports as well as the Swedish horse industry at large.
Details of the New Governance Framework
Under the new agreement, the Swedish government will relinquish its authority to nominate board members, transitioning from a model where six out of eleven board members were appointed by the state. The government’s role now will be significantly reduced, allowing ATG to govern itself with a board that features a majority of independent members, as directed by a newly mandated nomination committee. Furthermore, amendments to ATG’s articles of association can occur without requiring government approval.
Alongside this governance overhaul, the agreement entails an increase in financial contributions from ATG to the national foundation for the horse industry, ensuring a more robust support system for equestrian sports moving forward.
Shifting Towards Regulatory Reform in the Gambling Market
The government articulated that this reduction in involvement with ATG is part of a broader strategy to modernize and regulate the Swedish gambling market effectively. This initiative follows a significant parliamentary vote on April 2, aimed at closing land-based casinos, with the final state-owned venue set to shut its doors soon.
“Maintaining extensive governmental involvement is no longer justifiable,” stated Minister of Financial Markets Niklas Wykman, emphasizing the new agreement’s potential to foster greater operational responsibility within ATG. “This transition enables ATG to recruit a board capable of guiding the company towards enhanced professionalism and securing the future of Swedish equestrian sports.”
Industry Reactions: A Call for True Independence
Gustaf Hoffstedt, Secretary General of the Swedish trade association for online gambling, expressed optimism regarding the agreement, having long advocated for the government to diminish its control over monopolistic entities like ATG and Svenska Spel. He contended that ATG’s previous governance structure was incongruous with its position in a competitive market.
“The arrangement where the government dominated board representation was unusual for a private company operating in a competitive landscape,” Hoffstedt remarked. However, he raised concerns about the extent of the government’s ongoing influence, questioning whether any special agreements with ATG might persist, hindering a completely level playing field within the gambling market.
“A truly competitive market will emerge when ATG can operate alongside its peers, all adhering to the same regulatory framework,” Hoffstedt emphasized.
Looking Ahead: ATG’s Pursuit of Growth and Competitive Edge
Despite the regulatory challenges and recent tax hikes that have affected Swedish operators, ATG has demonstrated resilience and growth over the last year. CEO Hasse Lord Skarplöth has persistently urged the government to reconsider tax increases imposed on betting, which rose between 18% to 22% last year, further straining the industry’s revenue potential.
In its full-year report for the period ending December 31, 2024, ATG recorded a revenue of SEK 6.19 billion (£459 million/€551 million/$577 million), marking a modest increase of 2.5% year-on-year. However, net gaming revenue remained relatively stable at SEK 5.36 billion, a mere 1.7% rise. Operating profits reflected a similarly slight growth of 1.4%, totaling SEK 1.81 billion.
To capitalize on new opportunities, ATG has initiated a joint venture with Suomen Hippos, Finland’s equestrian association, aiming to penetrate the Finnish market ahead of anticipated gambling reforms. This partnership, structured as a 50/50 ownership division, targets a broad spectrum of betting options, covering sports, racing, and igaming, with profit distributions favoring Suomen Hippos.
In conclusion, ATG stands at the cusp of a transformative era, poised to redefine its operational landscape in collaboration with key stakeholders. As the company navigates the implications of reduced state control, its strategic maneuvers will undoubtedly shape the future of the Swedish gambling sector.
