Hasse Lord Skarplöth, the chief executive of Aktiebolaget Trav och Galopp (ATG), has called for differentiated tax in response to the government announcing proposals to increase gambling tax by 4%.
In September, Sweden’s government (Regeringen) outlined plans to hike the gambling tax rate in the country from 18% to 22% of gross gaming revenue (GGR). If approved, the tax rise will come into effect in Sweden from 1 July 2024.
While Regeringen believes the move could bring in an additional SEK540.0m (£39.3m/€45.5m/$48.4m) in tax revenue each year, the proposals met with strong opposition from the industry, including the ATG.
In a blog, Skarplöth labelled Regeringen’s plans a “shock”, and called for taxes on horse and other sports betting to remain the same, while increasing those on igaming. Skarplöth cited examples of other European countries with differentiated gambling taxes as reasons for the Regeringen to rethink its proposals.
Skarplöth said: “It came as a shock, the proposal for a higher excise tax on gambling companies. The ensuing reaction was a sense of resignation; how would the already hard-pressed horse industry cope with the fact that the contribution from ATG was greatly reduced?
“Shortly afterwards, the will to fight awoke; can there be a way forward that fills the treasury, without jeopardising equestrian sport?
“Strengthened by our research, we have now put quite a lot of energy into demonstrating the advantages of a differentiated gaming tax in Sweden as well. The hope is now that our analysis will move legislators from insight to action.
“It is a good starting point for our proposal; keep the tax on horse betting and sports, but raise it on online casinos.”
ATG vowing to clamp down on illegal gambling in Sweden
The ATG’s proposal for differentiated tax comes in the wake of the state-owned betting business promising to crack down on illegal gambling in Sweden.
In November, the ATG flagged a ten-fold increase on visitor traffic to unlicensed websites since 2019, when legal betting launched in Sweden.
ATG data showed channelisation rates for regulated online gambling in Q3 2023 was between 70% and 82%. While online sports betting had a channelisation rate of 88%, this decreased to 74% for online casino.
ATG estimated the illegal market is worth between SEK3.4bn and SEK6.7bn annually. The ATG also said two groups, Infiniza Limited and North Point Management Ltd, accounted for 60% of illegal gambling visitor traffic in Q3.
Skarplöth voiced his concerns over the figures, declaring the ATG will do what it can to tackle the issue moving forward.
“The results of our quarterly surveys are alarming and indicate that a significant percentage of problem gamblers in Sweden are linked to unlicensed gambling sites,” Skarplöth said.
ATG flourishing in steady Swedish market
GGR from Swedish licence-holders was steady in Q3 at SEK6.7bn, the same as the prior quarter. The largest increase in turnover came from land-based casinos, registering a 30.5% increase year-on-year.
The ATG, meanwhile, had a hugely successful period in the three months to 30 September 2023, with a double-digit rise in operating profit.
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. The group made an operating profit of SEK497m, up 13.7% year-on-year.
