ATG Q2 revenues up 2% as Swedish taxes hit profits

Former Swedish monopoly operator AB Trav och Galopp (ATG) has reported a 2% year-on-year rise in net gaming revenue for the second quarter of 2019, with revenues hitting SEK1.1bn (£93m).

Operating profits fell by 65% YoY during the same period to SEK302m, a decline which the company attributed to the impact of Swedish betting taxes and corporation tax.

As a consequence of the fall in operating profits, ATG’s operating margin fell from a Q2 2018 high of 82% to a Q2 2019 low of 23%.

Betting on horseracing continues to dominate ATG’s group revenues, accounting for SEK951m, or 87% of revenues accrued during the quarter. However, these figures were down 10% YoY from the horseracing revenues generated during Q2 2018, when revenues hit SEK1,058m.

ATG attributed this fall in revenues to increased competition and “important gaming liability measures” introduced as a result of the new Swedish Gambling Act.

Online casino revenues, for which the group has only been licensed to run since the turn of the year, accounted for 7% of group revenues, or SEK77m. Sports betting revenues accounted for 5% of ATG’s group revenues during the quarter, or SEK63m.

Sweden remains ATG’s dominant revenue generating market, accounting for SEK1,064m (98%) of the total revenue generated during Q2 2019. Revenues from the Danish market amounted to 2% or SEK27m of ATG’s total revenue generated during Q2 2019.

Despite the fall in operating profits due to taxation, ATG CEO Hasse Lord Skarploth said the Swedish Gambling Act had been a huge success, due to the high channelisation levels to licensed operators.

“Our two new product areas sports games and casino have got off to a good start. We believe we have taken five percentage points of market share and now have just under a third of the commercial license market.

“ATG is thus the largest gaming company within the commercial licenced market for the first six months of the year,” Skarploth added.