Sweden: Gambling tax debate puts ATG at odds with online operators
The UK government’s recent decision to almost double taxes on online gambling has rattled betting companies across Europe. In Sweden, it has also reopened a long-running argument about how gambling should be taxed. Online gambling firms and the horse racing operator ATG are now openly at odds, each insisting they are acting in the interests of consumer protection while accusing the other of warping the market to its own advantage.
While ATG is pushing for a higher general gambling tax combined with a lower effective rate for horse racing, online operators, represented by the trade association BOS, warn that such a decision would drive more players away from licensed companies and into the unregulated market, weakening the protections the system is designed to provide.
Online operators warn of consumer flight
On 15 December, BOS submitted a letter to the Swedish government signed by 13 gambling company executives alongside the association’s secretary general, Gustaf Hoffstedt. The letter urges ministers not to back ATG’s proposal, warning that higher taxes on online gambling would accelerate the drift towards unlicensed operators.
“The level of the gambling tax affects the proportion of consumers who choose to gamble on the legal licensed gambling market, and that too many consumers are already opting out of the safety of the licensed market with its extensive consumer protection,” BOS said in its press release accompanying the letter.
Hoffstedt argued that different gambling products already show different levels of channelisation. “Horse betting has a channelisation rate of between 98-99 percent. Online casino, according to the most optimistic estimates, has a channelisation rate of between 72-82 percent,” he said.
For BOS, this makes ATG’s proposal backward. “The higher the tax, the greater the risk that the consumer will choose unlicensed gambling, where neither gambling tax nor consumer protection exists,” Hoffstedt said. “To then lower the gambling tax for horse betting, which already has a very strong channelisation, and raise it for online casino, which has a very weak channelisation, would be completely incomprehensible. At least for those who prioritise consumer protection.”
BOS has consistently warned that tightening rules or raising costs for licensed online operators risks repeating what it sees as mistakes made in other countries, where large chunks of online gambling activity have moved offshore.
ATG points to risk and social benefit
ATG rejects the idea that a uniform gambling tax best serves the public interest. In a blog post published on 2 December, ATG’s chief executive, Hasse Lord Skarplöth, praised the UK government for explicitly differentiating between gambling products in its tax policy.
“The tax on online casinos and online betting will be increased from 21 to 40 percent next year, explicitly justified by “higher harm.” At the same time, the taxation of horse betting was left unchanged at an effective level of around 25 percent,” he explained.
“Online casinos don’t” finance anything beyond gambling itself, while horse racing supports “breeders, trainers, tracks, jobs, events and a living cultural heritage,” he added.
He argued that Sweden faces the same choice as the UK. “Either we continue to pretend that all forms of gambling are equal, or we tax according to actual risk and benefit,” he wrote. According to ATG, online casino games are “statistically associated with greater harmful effects”, while horse racing has “a significantly lower risk profile”.
Skarplöth also warned that recent tax changes had already hit the horse industry hard. “For ATG, this means a reduced contribution to trotting and galloping sports by SEK 200 million (€18.4 million) annually,” he wrote, calling for a return to a lower tax rate on horse racing and suggesting that “raising the tax rate on online casinos to 26 percent feels both reasonable and responsible as financial compensation”.
A familiar fault line in Sweden’s gambling debate
The tax dispute is the latest chapter in a broader conflict within Sweden’s gambling sector. BOS has repeatedly clashed with ATG and state-owned Svenska Spel over proposals ranging from bonus bans to stricter advertising rules, arguing that measures presented as consumer protection often have the side effect of strengthening the state-backed operator at the expense of private competitors.
In a recent interview with SiGMA News, Hoffstedt said that “the elephant in the room for consumer protection is that consumers are to such a large extent absent from the legally licensed part of the gambling market”, warning that policies making licensed gambling less attractive “is to give up the fight of defending the licensed gambling market and its consumer protection”.
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