Hasse Lord Skarplöth, CEO of Aktienbolaget Trav och Galopp (ATG), has called for differentiated taxation in response to the government’s announcement of a 4% increase in gambling tax.

In September, the Swedish government (Regeringen) unveiled plans to increase the country’s gambling tax rate from 18% to 22% of gross gambling turnover (GGR). If approved, the tax increase in Sweden will come into effect from July 1, 2024.

While Regeringen believes the move could bring in an additional SEK 540.0m (£39.3m/€45.5m/$48.4m) in tax revenue each year, the proposals have faced strong opposition in the industry, including ATG.

In a blog, Skarplöth described Regeringen’s plans as a “shock” and called for taxes on horse and other sports betting to remain the same and for iGaming to be increased. Skarplöth cited examples of other European countries with differentiated gambling taxes as reasons for the Regeringen to reconsider their proposals.

Skarplöth said: “The proposal for a higher excise tax on gambling companies was a shock. The reaction that followed was a feeling of resignation; How would the already pressured horse industry deal with ATG’s contribution being greatly reduced?

“Soon afterwards the will to fight awoke; Can there be a way forward that fills the treasury without endangering equestrian sport?

“Strengthened by our research, we have now put a lot of energy into demonstrating the advantages of a differentiated gambling tax in Sweden too. The hope now is that our analysis will move lawmakers from insight to action.

“It is a good starting point for our proposal; Keep the tax on horse racing and sports, but increase it on online casinos.”

ATG promises to take action against illegal gambling in Sweden

ATG’s proposal for a differentiated tax follows the state-owned betting company’s promise to crack down on illegal gambling in Sweden.

In November, ATG reported a tenfold increase in traffic to unlicensed sites since 2019, when legal betting was introduced in Sweden.

ATG data showed that channelization rates for regulated online gambling ranged from 70% to 82% in the third quarter of 2023. While online sports betting had a channelization rate of 88%, this fell to 74% for online casinos.

ATG estimates that the illegal market is worth between SEK 3.4 and 6.7 billion annually. The ATG also said two groups, Infiniza Limited and North Point Management Ltd, accounted for 60% of illegal gambling traffic in the third quarter.

Skarplöth expressed concern about the numbers and said that the ATG would do its best to address the issue in the future.

“The results of our quarterly surveys are alarming and show that a significant percentage of problem gamblers in Sweden are associated with unlicensed gambling sites,” said Skarplöth.

ATG is thriving in the stable Swedish market

The GGR of Swedish license holders remained stable at SEK 6.7 billion in the third quarter, the same as in the previous quarter. Land-based casinos saw the largest increase in revenue, recording a 30.5% increase compared to the previous year.

ATG, on the other hand, had an extremely successful period in the three months up to September 30, 2023, with a double-digit increase in operating profit.

Net gaming revenue increased 4.5% to SEK 1.35 billion from SEK 1.29 billion last year. The second-highest third quarter figure in ATG’s history was achieved despite the Swedish market faltering in the first half of the year.

Total sales for the three-month period amounted to SEK 1.53 billion, an increase of 3.0% year-on-year. The group achieved an operating profit of SEK 497 million, an increase of 13.7% compared to the previous year.