Aktiebolaget Trav och Galopp (ATG), Sweden’s former horse racing monopoly, posted its Q1 financial results, highlighting a bumpy period for the company. The suboptimal results were attributed to the macroeconomic headwinds.

ATG’s net gaming revenue for the first three months of 2023 was SEK 1.19 billion (around $116 million). This figure represents a 5.9% year-on-year decrease, showing that the company’s business has been impacted by troubles.

The company’s total revenue for the period was SEK 1.37 billion (around $133 million), which translates to a decline of 6.1%. The company’s operating profit for the period, meanwhile, plummeted by 15.7% to $30.8 million.

Horse racing revenue made up 75% of the company’s total net gaming revenue in Sweden and 23% of the net gaming revenue in Denmark. At the same time, casino gaming was responsible for 54% of the company’s Danish revenue and only 9% of its revenue in Sweden.

In Q1 2023, ATG had to pay a gaming tax of $23.7 million, marking a 5.8% year-on-year increase. Its personnel expenses also increased to $13.5 million, an 11.2% YOY rise.

Skarplöth Blamed the Cost of Living Crisis and Inflation

The company’s chief executive officer, Hasse Lord Skarplöth, commented on ATG’s performance in Q1 2023. He noted that the company had to keep pushing against various economic headwinds, including the rising cost of living, inflation and high interest rates. These are the same reasons why the company’s FY 2022 experienced a slight decline.

According to Skarplöth, the company’s Q1 results mirror the overall economic situation. However, not everything is grim for the former monopoly as some of its products showed improvement in Q1 2023.

According to the CEO, the company’s sports betting and casino products recorded improvements of 10% and 20% respectively. However, net revenue from horse racing operations, which are the company’s primary focus, still experienced a decline. Luckily, ATG continues to maintain its market share, Skarplöth concluded.

ATG Was Fined Over AML and Self-exclusion Failings

The suboptimal financial results are not the only trouble ATG has been facing. Last year, the company got into trouble after the Spelinspektionen, Sweden’s gambling regulator, uncovered various AML failings.

As a result, the ex-monopoly was forced to pay a fine of $570,000 and received a formal warning from the regulator.

This fine followed an earlier rule violation where ATG’s self-exclusion scheme did not appear to certain players because of technical failings. This breach earned the operator a $188.4 fine.

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