Revenue Decline at ATG Driven by Increased Gambling Tax and Horse Racing Woes
ATG, the prominent Swedish gaming operator, faced a challenging first half of its 2025 financial year, reporting a noticeable dip in both revenue and net profit. This downturn is largely attributed to a slump in its traditional horse racing betting segment.
For the six months ending June 30, ATG’s revenue totaled SEK 2.92 billion (around $306 million), reflecting a 5% decrease compared to the same period last year. Additionally, the company recorded a 5% fall in net gaming revenue, amounting to SEK 2.57 billion.
Notably, while revenue from its core horse racing business dropped significantly, sports betting was an exception, posting a modest increase. However, the casino sector experienced a substantial decline, with losses exceeding 10%.
Despite these revenue challenges, ATG’s customer base remained stable at approximately 1.4 million, underscoring its position as Sweden’s leading gaming company. CEO Hasse Lord Skarplöth expressed confidence in their commitment to the horse racing industry, stating, “Even amidst global uncertainty, I’m unwavering in our determination to support trotting and galloping sports in Sweden.”
Looking Ahead: New Opportunities with Finland Joint Venture
Skarplöth acknowledged that the anticipated revenue for the full fiscal year is likely to be lower, partly due to new regulatory taxes impacting financial results. Nevertheless, he holds an optimistic outlook for ATG’s future, particularly with the launch of its joint venture, Hippos ATG, in collaboration with the Finnish equestrian organization, Suomen Hippos. This venture aims to tap into the Finnish market by offering betting on horse racing, alongside iGaming and sports betting, pending the approval of a new gambling reform bill expected to open Finland’s market to private operators by January 2027.
Mikael Bäcke has been appointed as CEO of Hippos ATG, noting that the joint venture will leverage ATG’s proprietary gaming platform while maintaining operational independence.
Horse Racing Revenue Declines Amid Sports Betting Growth
Examining the first half closely, ATG experienced a 5% drop in net gaming revenue from horse racing, falling to SEK 1.87 billion, compared to SEK 1.96 billion a year prior. Sports betting achieved a 3% revenue increase to SEK 393 million, with early gains in Q1 compensating for a decline in Q2 due to demanding year-on-year comparisons from major sporting events.
The casino division did not fare well, reporting a 13% decrease in revenue to SEK 304 million—a decline attributed to significant jackpot payouts early in the year.
The bulk of ATG’s gaming revenue in H1 was generated through digital channels, which amounted to SEK 2.34 billion, while retail betting contributed SEK 227 million. Swedish operations accounted for SEK 2.41 billion of the total net gaming revenue, supplemented by SEK 160 million from operations in Denmark under the Bet25 brand.
Profitability Takes a Hit with Rising Taxes
The rise in gambling taxes in Sweden, which increased from 18% to 22% in July 2024, has further clouded ATG’s financial performance. Tax contributions surged from SEK 560 million to SEK 627 million over the period, negatively impacting the operating profit, which fell by 20% year-on-year.
Pre-tax profits decreased by 21% to SEK 676 million, resulting in a net profit of SEK 652 million for H1—a decrease of 22%.
A Similar Trend in Q2
ATG’s struggles were mirrored in the second quarter, where total revenue was down 2% year-on-year at SEK 1.54 billion, and net gaming revenue showed a similar 2% decline, landing at SEK 1.39 billion. Operating and pre-tax profits also suffered, down 11% and 10%, respectively, leading to a Q2 net profit of SEK 394 million—12% lower than the previous year.
As ATG navigates these challenges, it remains to be seen how the new ventures and market conditions will shape its path forward.