Aktiebolaget Trav och Galopp (ATG) has welcomed a double-digit rise in operating profit despite challenging conditions that have caused the Swedish market to stall.
In a trading update for the three months to 30 September 2023, the state-owned betting business said net gaming revenue was up 4.5% to SEK1.35bn from SEK1.29bn last year. The second highest figure for a third quarter in ATG’s history came despite the Swedish market stalling in H1.
Total revenue for the three-month period was at SEK1.53bn, which was up 3.0% year-on-year. Net gaming revenue for racing was up by just over 1.8% to SEK1.02bn. Sports betting was also up slightly from SEK151m to SEK159m.
The group made an operating profit of SEK497m, which was up 13.7% year-on-year. The increase was in part down to a 3% reduction in operating expenses to SEK761m. ATG said the savings came from cutbacks in marketing and consultancy costs.
“We’re growing revenue – net gaming revenue in the third quarter is historically our second highest,” said ATG’s chief executive, Hasse Lord Skarplöth. “And we cut costs. But the economy going forward is still a cloud of worry.
“After a decline during the first quarter, influenced by the general economy and last year’s pandemic effects, we see continued growth in the third quarter as well. We increase revenues and lower our costs. This is an effect of continued customer focus as well as strict priorities, consultant turnover and cost control.”
Lord Skarplöth reiterated ATG’s opposition to government plans to increase gambling tax from 18% to 22% from July 2024. ATG estimates this will mean an extra SEK200m on its tax bill, which it claims will be a loss to Sweden’s racing industry.
“Our proposal is that the tax on betting is kept at 18 per cent and the tax on commercial online gambling (casino and poker) is raised to 26 per cent,” he said.
Generally positive results in Q3
Casino was the biggest area of growth, although it is ATG’s smallest vertical. Casino grew by 24.2% to SEK169m.
ATG’s retail business fell by 23.3% to SEK154m. However, the much bigger digital channel continued to grow. Net gaming revenue for digital increased by 9.7% to SEK1.20bn.
Denmark accounted for SEK92m of net gaming revenue, which was up 18.0% year-on-year.
According to Spelinspektionen figures, the Swedish market saw gross gambling revenue drop by 1% during the three months to 30 June. Commercial online gambling and sports betting, lottery, slots and land-based commercial gaming were all down during the period.
Svenska Spel saw a 1% increase in both revenue and operating profit during the most recent quarter.