Sweden: ATG recovery continues as sports betting softens horse racing decline

AB Trav och Galopp (ATG), one of Sweden’s more prominent and well-established operators, has revealed that its revenue remains lower than in 2021, but maintains faith in a continued bounceback. 

As outlined in its interim trading report, the horse racing, sports betting and online casino operator experienced a net gaming revenue decline of 2% between January and June 2022. 

The figure stood at SEK 2.59bn (€245m), a marginal reduction on the previous year’s revenue of SEK 2.63bn, but operating profit continued to take a hit, falling by 14% from SEK 917m (€86m) to SEK 805m (€76.1m). 

Turning to revenue in the second quarter, earnings fell from SEK 1.4bn (€132.3m) to SEK 1.3m (€122.8m), with an operating profit of SEK 424m (€40m), 14% lower than 2021’s SEK 495m (€46.8m).

Although a drop in income has occurred, ATG has remained positive, asserting that figure is still the second highest in group history, as well as pointing to an ‘expected effect of increased competition from other amusements’ and the continued impact of COVID presenting difficult comparatives.

Reflecting on H1 and Q2 2022, CEO Hasse Lord Skarplöth said: “Just like the first quarter, the second quarter’s comparative figures are affected by corona effects, which is why a comparison with the first half of last year is not really a relevant receipt of ATG’s development in the past year. 

“Having said that – in a longer historical perspective, and the ongoing unrest in our world around us, ATG was doing well during the beginning of 2022. Looking at the period January-June, the net gaming revenues – SEK 2.6bn –  are the second highest in the company’s history.”

ATG used to be the only firm allowed to provide horse race betting in Sweden, but legal reformation has allowed other operators to begin offering this product to customers in the country. 

However, as a result of this change, the former monopoly is now allowed to provide other betting and gaming services, providing additional sources of revenue. 

Despite differentiation of its product offering, horse racing remains by the far the most dominant and lucrative source of income for ATG – accounting for 82% of Q2 revenue in comparison to sports wagering (11%) and casino (7%).

Yet, betting on racing fell by 6% during H1 from over SEK 2.1bn (€198.5m) to SEK 2bn (€189m), although Skarplöth asserted that public interest in the sport is ‘still very high’. 

Racing’s decline was softened by an improvement in sports betting operations, which rose by 3% from SEK 319m (€30.1m) to SEK 328m (€31m). The CEO stated: “ATG continues to gain market share and is now the largest sports betting company on the commercial licence market in Sweden.”

In Q2, NGR from horse racing decreased by 5% or SEK 51m (€4.8m) and sports betting fell by 5% or SEK 29m (€2.7m), but casino revenue rose by 16% or SEK 40m (€3.8m).

Looking forward, Skarplöth noted that the ‘strongest correlating factor’ the firm is considering as potentially impacting its turnover is changes in households’ disposable income. 

“Going forward, ATG will continue to work towards clearly formulated goals and customer promises,” he concluded.

“This means continued work with constant development of, and investments in, the gaming products for continued growth with cost-effectiveness. 

“This is to continue delivering good results and in that way live up to the task and mission of being the horse industry’s engine and the gaming industry’s compass.”

Potential legislative changes in Sweden also cast a constant shadow over betting and gaming operations in the country, with submissions to the Riksdag proposing gambling law reform a regular occurrence over the past couple of years. 

A general election is currently scheduled to take place on 9 September, which could usher in a government with a different approach to gambling as a four-party right-wing political bloc challenging the centre-left Social Democrats. 

One of the members of this bloc – the Moderaterna Party – has suggested a division of the state-owned Svenska Spel monopoly between a lottery and keno division and gambling and sports betting division.

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