ATG posts 15% lower profits after Sweden raises gambling tax

AB Trav och Galopp reported a notable decline in profitability for the 2025 financial year, as higher taxation and softer consumer demand weighed on its margins. The company’s operating profit fell by 15 percent to SEK 1.5 billion, compared to the previous year, reflecting the combined impact of regulatory adjustments and subdued economic conditions in Sweden.

Net gaming revenue amounted to SEK 5.2 billion, representing a 2 percent year on year decline. Total group revenue reached SEK 6.0 billion, down 4 percent compared to 2024. While the contraction was moderate in absolute terms, its effect on profitability was amplified by structural cost components, particularly gambling tax.

Operating margin narrowed to 26 percent, down from 29 percent in 2024. The figures illustrate how fiscal policy changes can materially affect licensed gambling operators even when customer volumes remain relatively stable.

Swedish gambling tax increase impacts margins

A central factor behind the weaker result was the increase in Sweden’s gambling tax rate. The tax was raised from 18 percent to 22 percent, a policy adjustment that significantly increased ATG’s fiscal burden.

The company disclosed that the higher tax rate reduced its result by SEK 216 million in isolation. Gambling tax expenses totalled SEK 1.3 billion for the year, marking a 7 percent increase compared to the prior period.

Overall costs, including gambling tax, reached SEK 4.4 billion. Excluding gambling tax, operating expenses amounted to SEK 3.1 billion, reflecting a 1 percent decrease year on year. This suggests that management undertook cost control measures to offset at least part of the external pressure. However, the scale of the tax increase outweighed these efficiencies.

The Swedish gambling market has operated under a regulated licensing framework since 2019, with taxation playing a central role in public revenue generation. The 2025 rate increase forms part of broader fiscal tightening, affecting all licensed operators active in the jurisdiction.

Segment performance across verticals

ATG’s business portfolio spans horse racing, sports betting and online casino. In 2025, all three verticals experienced some degree of decline, though performance varied by segment.

Horse racing, which remains the company’s core segment, recorded a 1 percent decrease in revenue. While relatively modest, the dip reflects reduced discretionary spending among consumers during a prolonged period of economic uncertainty.

Sports betting revenue fell by 2 percent. This segment remains sensitive to both macroeconomic conditions and sporting event calendars. Fluctuations in betting margins and customer activity can have a direct impact on quarterly and annual outcomes.

Casino was the weakest performing vertical, with revenue declining by 7 percent. The more pronounced contraction may be linked to intensified competition in the regulated online market, as well as shifting player behaviour amid tighter household budgets.

Despite these declines, ATG maintained a broad customer base. The company reported 1.4 million active customers during the year, a figure that remained stable compared to previous periods.

Stable customer base provides resilience

Commenting on the results, Chief Financial Officer Lotta Nilsson highlighted the importance of customer retention in a challenging environment.

“We have a stable and engaged customer base with 1.4 million active customers. That is a clear strength for ATG and an important foundation for our continued development,” said Lotta Nilsson, CFO of ATG.

The stability of the customer base indicates that while average spend per user may have declined, overall engagement levels have remained comparatively resilient. In regulated markets, brand trust, compliance standards and responsible gambling frameworks often play a key role in sustaining customer loyalty.

ATG’s long standing association with horse racing in Sweden contributes to a differentiated market position. However, as competitive pressures increase across digital betting and casino platforms, maintaining engagement requires ongoing investment in technology, product development and responsible gambling safeguards.

Implications for horse racing funding

Beyond its commercial performance, ATG’s financial results carry broader implications for Sweden’s horse racing sector. The company operates within a structure in which returns are linked to funding for racing activities.

Nilsson acknowledged the significance of the 2025 outcome in this context.

“2025 was a weaker year in terms of results. The prolonged economic downturn put pressure on revenue while the increased gambling tax raised our costs,” Nilsson said.

“Both the lower revenues and the increased gambling tax directly impact returns to our owners and thereby weaken the financing of horse racing. This is a development we view seriously,” she added.

As a result, reduced profitability may translate into lower distributions to stakeholders connected to the racing industry. This dynamic underscores the interconnected nature of regulated gambling operators and the sectors they support.

Parent company performance and financial structure

The parent company’s result before transactions with owners amounted to SEK 2.1 billion. This figure corresponds to 35 percent of total group revenue, reflecting continued underlying strength despite the year’s headwinds.

While operating profit declined, the company remains profitable and maintains a significant revenue base. The reduction in operating margin to 26 percent signals pressure but does not indicate structural instability.

From a financial governance perspective, the company appears to have responded to fiscal and market pressures through moderate cost discipline. Operating expenses excluding gambling tax were reduced by 1 percent, demonstrating efforts to contain controllable costs.

Broader regulatory and economic context

The Swedish regulated gambling market has undergone substantial evolution since the introduction of its licensing system. Regulatory adjustments, including tax modifications, are part of ongoing policy development aimed at balancing consumer protection, channelisation and public revenue objectives.

At the same time, macroeconomic conditions have influenced consumer spending patterns. Inflationary pressures and higher household costs across Europe have affected discretionary expenditure categories such as entertainment and gaming.

For operators like ATG, these dual pressures create a complex operating environment. While regulatory stability offers long term clarity, tax increases can compress margins. Similarly, customer retention may remain steady even as per customer spending declines.

The 2025 results reflect this intersection of fiscal policy and consumer behaviour. Although revenue contraction was limited in percentage terms, profitability was more materially affected due to the fixed nature of certain cost components.

Strategic outlook and development priorities

Looking ahead, ATG’s ability to sustain profitability will likely depend on several factors. These include further regulatory developments, the trajectory of Swedish consumer demand and competitive dynamics within digital betting and casino.

Maintaining a stable customer base provides a foundation for incremental growth once economic conditions improve. Investment in digital platforms, product innovation and responsible gambling tools will remain essential components of the company’s strategy.

Additionally, continued dialogue between industry participants and policymakers may shape future tax and regulatory adjustments. Operators must balance commercial objectives with compliance obligations and societal expectations.

While 2025 represented a weaker financial year, the company’s continued profitability and strong customer base indicate resilience within a regulated framework.

Conclusion

ATG’s 2025 financial performance illustrates the measurable impact that regulatory tax increases and economic headwinds can have on a licensed gambling operator. A 15 percent decline in operating profit to SEK 1.5 billion, alongside a 2 percent fall in net gaming revenue, reflects a year defined by compressed margins rather than structural contraction.

The increase in Sweden’s gambling tax from 18 percent to 22 percent materially affected results, adding SEK 216 million in isolated impact and lifting total gambling tax payments to SEK 1.3 billion. At the same time, softer consumer demand contributed to modest declines across horse racing sports betting and casino segments.

Despite these pressures, ATG maintained 1.4 million active customers and continued to generate substantial revenue and profit. The company’s financial stability, cost discipline and established market position provide a platform for adaptation in an evolving regulatory and economic landscape.

In a tightly regulated market, fiscal policy decisions can have direct operational consequences. ATG’s experience in 2025 underscores the importance of strategic resilience, prudent financial management and constructive engagement with stakeholders as the Swedish gambling sector continues to mature.

FAQs

What caused ATG’s profit decline in 2025?
The primary factors were the increase in Sweden’s gambling tax from 18 percent to 22 percent and weaker consumer demand which reduced margins across key segments.

How much did ATG’s operating profit fall?
Operating profit declined by 15 percent to SEK 1.5 billion compared to the previous year.

What was the impact of the tax increase on results?
The company stated that the higher tax rate reduced its result by SEK 216 million in isolation.

How did net gaming revenue perform in 2025?
Net gaming revenue reached SEK 5.2 billion which represents a 2 percent year on year decline.

Which segment performed worst during the year?
The casino segment recorded the largest decline with revenue falling by 7 percent.

Did ATG lose customers in 2025?
No. The company maintained a stable base of 1.4 million active customers during the year.

How much did ATG pay in gambling tax?
Gambling tax expenses totalled SEK 1.3 billion which was a 7 percent increase compared to the previous year.

What was the company’s operating margin in 2025?
Operating margin decreased to 26 percent down from 29 percent in 2024.

How does ATG’s performance affect horse racing funding?
Lower profitability reduces returns to owners which may weaken financing for horse racing activities in Sweden.

Is ATG still profitable despite the decline?
Yes. Despite the decline in profit the company remained profitable with substantial revenue and a strong customer base.