ATG faces challenges in Q3 2024

Garance Limouzy October 24, 2024

ATG’s third-quarter report for 2024 reveals that the company faced several challenges, which impacted its results. The heightened gaming tax and external competition, especially in the horse racing sector, contributed to a weaker Q3. Despite this, the overall performance for the first nine months showed resilience, with some record-breaking figures.

Revenue growth amid rising costs

According to the , net gaming revenue for the first nine months of 2024 reached 4 billion SEK (€350 million), a modest 2 percent increase compared to the same period in 2023. This is the highest net gaming revenue in the company’s history. As ATG CFO Lotta Nilsson Viitala commented, “We are on the plus side over the entire period, but the third quarter has been tougher, especially for horse racing.” She further added, “The increased gaming tax has also affected our results, single-handedly raising our costs by 55 million SEK (€5 million).” The company’s three gaming sectors—horse racing, sports betting, and casino—each showed growth, with the casino sector leading the way at a 10 percent increase. Sports betting saw a 2 percent rise, while horse racing, despite challenges, posted a modest 1 percent increase. However, Q3 saw a decline in horse racing revenue by 6 percent.

Q3 challenges

The third quarter presented challenges for ATG, particularly in the horse racing segment. “We see several reasons for the challenges in Q3,” noted Nilsson Viitala. “There was competition from major events like the men’s European Football Championship and the Summer Olympics. Additionally, the period had one fewer Saturday featuring our largest game, V75®, which also saw a weaker trend during this time.”

The number of active customers remained steady at around 1.4 million, with continued emphasis on responsible gaming. “Both figures—our share of green customers and green turnover—have improved during the year, which is encouraging,” said Nilsson Viitala.

Increased gaming tax

The gaming tax was increased from 18 percent to 22 percent in July. According to CEO Hasse Lord Skarplöth, this tax hike has had a profound impact on ATG’s financial performance. “The tax increase, as well as lower net gaming revenues in the third quarter, affected three of our most important key figures for the first nine months of the year,” he said. These figures include the operating profit of 1.2 billion SEK (€105 million), which remained flat compared to the previous year. Skarplöth referred to the increased gaming tax as a “horse tax,” stressing that ATG contributes roughly 40 percent of the state’s new gaming tax revenues. He added, “The tax increase affects our surplus to our owners, Svensk Travsport and Svensk Galopp, and thus the entire Swedish horse industry. It can hardly have been the intended consequence of the tax increase.”

Performance across sectors

Breaking down the company’s performance, the horse racing sector saw net gaming revenues rise by 1 percent to 2.92 billion SEK (€256 million) over the first nine months. A total of 120 jackpot wins were distributed in this period. The sports sector saw a 2 percent growth, with revenues reaching 541 million SEK (€47 million), bolstered by the popularity of the men’s European Football Championship. In 2024, ATG continued to solidify its position as the second-largest sports betting company in the country and the leading player in the sports betting category. Casino operations were the standout performer, with a 10 percent increase in net gaming revenues, bringing in 517 million SEK (€45 million). Skarplöth attributed this growth to an increase in the number of customers. “We want to offer an exciting casino experience that aligns with our commitment to responsible gaming, and it’s gratifying to see these positive numbers.”

Looking ahead

Looking ahead, ATG remains focused on its long-term goals, despite the challenges posed by external economic factors such as low inflation and interest rates. Skarplöth hinted at the potential positive effects these could have on consumers’ disposable income, although no immediate impact has been observed. “There are signs in the economy—lower inflation and lower interest rates—that could positively affect our customers’ entertainment budgets, but we have not yet seen any effect from the improved economy.”