Sweden’s Government Proposal and AGT’s Response
The Swedish government (Regeringen) has plans to hike the gambling tax rate from 18% to 22% of the gross gaming revenue. If approved, this change will come into effect on July 1st, 2024. As stated, this tax rise will bring an additional 540 million SEK in tax revenue each year.
This proposal was not received very well by the public. The chief executive of Aktiebolaget Trav och Galopp (ATG), Hasse Lord Skarplöth, replied with a statement, saying that the government’s plans came as a shock. He suggested that the taxes on sports betting and horse race betting remain the same, and the increase applies only to igaming.
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?’
He said that such a change would only jeopardize the already well-established sports betting industry. Skarplöth used examples from other European countries as reasons why the government should rethink this tax change. In his opinion, the sports market should remain the same, and the tax rate change be applied only to the igaming industry, which includes the list of licensed Swedish online casinos.
Illegal Gambling in Sweden
One of the reasons for the proposal of the ATG is trying to reduce and prevent illegal gambling activities in Sweden. As per the latest analysis and statistics, the government stated a significant growth of illegal gambling and vowed to take action.
An increase of illegal traffic to unlicensed casino websites has hugely increased since 2019 after legal betting in Sweden was approved. ATG’s research unveils that channelization rates of regulated online gambling in the third quarter of 2023 were between 70 and 82%, while sports betting had a rate of 88%, as opposed to 74% for online casinos.
Two malicious groups are the main culprits – Infiniza Limited and North Point Management. They account for 60% of illegal gambling visitor traffic in Q3 of 2023. ATG asserted concern over this data and announced that they would do everything in their power to try and resolve the issue in the future.
Data and Research Findings
Research has estimated that the illegal igaming market is worth between 3.4 and 6.7 billion SEK per year, according to ATG. The two malicious groups mentioned above are the main culprits. Here are some interesting statistics about the Swedish online gambling industry that players should consider and be aware of.
- The government’s tax proposal is a 4% rise.
- Regeringnen estimates this will bring an additional SEK540 million in revenue each year.
- Since 2019, there has been a ten-fold increase in traffic to unlicensed websites.
- Channelization rates for regulated gambling in Q3 of 2023 were between 70% and 82%.
- Sports betting’s rate was 88%, which decreased to 74% for online casinos.
- The illegal market is worth at least SEK3.4 billion annually.
- ATG’s net gaming revenue was up by 4.5% last year.
This information proves that ATG’s proposal might be a clever idea and should be taken into consideration. The Swedish government estimates that the change will bring an additional tax revenue every year and will help with the fight against illegal gambling.
Skarplöth does not completely agree with this, as according to him, the tax change will affect online gambling and reimburse illegal activity across gambling sites. He believes that “their quarterly surveys are alarming and indicate a significant portion of problem gamblers in Sweden, linked to unlicensed gambling sites”.
ATG will take any action necessary to shut down groups like Infiniza Limited and North Point Management Ltd and severely reduce illegal gambling traffic.
ATG’s Successful Period
The GGR from Swedish license-holders in Q3 of last year held steady at SEK6.7 billion, which applies to the previous quarter as well. The increased turnover comes from land-based casinos, registering a 30.5% increase from year to year.
Meanwhile, ATG had a profound influence on the Swedish gambling market in the three months leading to September 2023, resulting in a double-digit increase in operating profit.
Compared to last year, net gaming revenue was up by 4.5% to SEK1.35 billion from SEK 1.29 billion the previous year. This led to AGT’s highest figure in history, even though the Swedish market was previously stalled.
For three months, the total revenue was SEK1.53 billion, up from 3.0% year-to-year. In total, ATG made an operating profit of SEK497 million, indicating a rise of 13.7% compared to before.