In response to proposals by the government of Sweden for a 4 percent hike in the gambling tax, Aktiebolaget Trav och Galopp (ATG) CEO Hans Lord Skarplöth is urging the government (Regeringen) to instead adopt a differentiated tax rate, iGaming Business reported January 22.
The 4 percent hike from 19 percent to 22 percent of gross gaming revenue (GGR) was first unveiled last September. If the rate is approved it would become effective July 1 of this year.
The government estimates the hike will collect SEK540.0 million (£39.3 million/€45.5 million /$48.4 million) more in tax revenue annually. The proposal has prompted a strong negative reaction from the sector.
In a blog post, Skarplöth argued for taxes on all forms of sports betting to remain in place, except for an increase on online gaming. He gave examples of other members of the EU with differentiated tax rates for gaming.
He declared, “It came as a shock, the proposal for a higher excise tax on gambling companies. The ensuing reaction was a sense of resignation; how would the already hard-pressed horse industry cope with the fact that the contribution from ATG was greatly reduced?” He added, “Shortly afterwards, the will to fight awoke; can there be a way forward that fills the treasury, without jeopardizing equestrian sport?“
The horse racing industry in Sweden is already considered to be struggling, said the CEO.
He concluded, “It is a good starting point for our proposal; keep the tax on horse betting and sports, but raise it on online casinos.”
The government issued its call for an increase in the taxation rate at the same time the government gambling monopoly has promised to enforce laws against illegal gambling sites. Recently ATG called the government’s attention to a ten-fold increase in traffic to illegal websites since 2019, when the legal market was launched.
ATG’s data indicated a 70 percent to 82 percent channelization rate for online gaming during the third quarter of 2023. ATG estimates the black market to be worth between SEK3.4 billion ($325,262,428) and SEK6.7 billion ($640,927,628) with Infiniza Ltd. and North Point Management Ltd. accounting for more than half of that.
Skarplöth added, “The results of our quarterly surveys are alarming and indicate that a significant percentage of problem gamblers in Sweden are linked to unlicensed gambling sites.”
According to Skarplöth only the Cyprus, Malta and Dutch markets have a unified tax scheme for all forms of gaming. He added that most EU countries have a higher tax on online gaming to fight problem gambling.
The CEO said he hoped ATG’s analysis would motivate lawmakers “from insight to action.”
The government has committed to settling on a tax rate for the industry by early 2024 in order to implement the changes adopted to the Gambling Act last April.
