ATG Sees Strong Growth Despite Challenges from Tax Hike
Sweden’s recent decision to raise the gross gaming revenue (GGR) tax for gambling operators from 18% to 22% has drawn sharp criticism from industry leaders, particularly AB Trav och Galopp (ATG), the nation’s horse racing monopoly.
Swedish Government Introduces Higher Gambling Tax
On July 1st, Sweden raised its gross gaming revenue (GGR) tax on gambling operators from 18% to 22%.
The increase is expected to generate over SEK500 million annually, but the move has sparked criticism within the industry, particularly from AB Trav och Galopp (ATG), Sweden’s horse racing monopoly.
ATG Criticizes “Illogical” Tax Burden
ATG’s CEO, Hasse Lord Skarplöth, voiced his concerns over the tax hike, labeling it as harmful to Sweden’s horse racing industry.
He pointed out that of the SEK500 million in projected tax revenue, SEK200 million will likely come from ATG, which disproportionately affects the operator.
According to Skarplöth, this “horse tax” will lead to higher costs, reducing ATG’s ability to financially support the country’s horse racing sector.
Call for Targeted Online Casino Tax Instead
Skarplöth has been vocal about his preference for an alternative solution. ATG previously advocated maintaining the 18% tax rate on betting and horse racing while raising the tax on online casinos to 26%.
He argued that this would generate even more revenue than the current tax plan, while also addressing public health concerns, as online casinos are more often linked to gambling addiction.
Q2 Performance Remains Strong
Despite the concerns over taxation, ATG’s performance in Q2 was positive. The operator reported a 2.6% increase in total revenue year-on-year, reaching SEK1.57 billion.
Net gaming revenue rose by 3.3%, even though horse racing revenue dipped slightly by 1%.
However, this was balanced by significant growth in sports betting and online casino revenue, with the latter seeing a 16.6% increase.
ATG’s Online Revenue Thrives
A notable trend in Q2 was the growth in ATG’s online operations, which accounted for SEK1.26 billion of net gaming revenue, a 7.2% rise.
In contrast, retail revenues saw a sharp decline of 23.4%, reflecting a broader industry shift towards digital platforms.
Steady Profit Growth for ATG
ATG’s operating expenses were slightly reduced compared to last year, contributing to a 5.9% rise in operating profit.
The company’s pre-tax profit grew by 3.8%, ending Q2 with a net profit of SEK448 million, marking a 4.7% improvement from the previous year.
Record-Breaking First Half of the Year
The first half of 2023 proved to be a record-setting period for ATG. Net gaming revenue reached SEK2.69 billion, with a total revenue increase of 5.6%.
ATG reported growth across all segments of its business, maintaining control over operating costs and achieving a 13.2% rise in net profit compared to H1 of the previous year.
Ongoing Concerns for the Future
While ATG has enjoyed a period of solid growth, the looming impact of the tax hike remains a significant concern.
Skarplöth has pledged to continue advocating for a more targeted tax structure that could better support the horse racing industry without placing undue financial strain on operators like ATG.
