Swedish government dismisses mandatory horseracing levy proposal
Inquiry into gambling market highlights “unjustifiable” costs and threat to channelisation
A mandatory betting levy on Swedish horseracing would harm channelisation and weaken the existing market, according to a Swedish government inquiry.
Delivering its interim report on the financing of the Swedish horseracing industry, officials dismissed the need for a new mandatory levy similar to those in operation in Denmark and the UK.
The report asserts the current model, in which former monopoly operator ATG provides funding to the sector through its earnings, was “sustainable” and should not be changed or added to.
Officials suggested ATG’s competitive dominance over the Swedish market is such that other operators within the market would only contribute a small amount to the total mandatory levy collected from the market, with ATG bearing the biggest burden.
The report further claimed that such a fee, if implemented, was “not justifiable” and would weaken ATG’s earnings and shareholder dividends, which are made up of representatives across the horseracing sector.
“It is the inquiry’s assessment that an additional charge in the form of a market fee, in addition to the existing excise duty, incites risks that negatively affect the channelling of games and also risks inhibiting competition for such a game,” the report claimed.
“According to the investigation, there is no defined state commitment in the field of trotting and galloping which would offset the potentially negative effects on the gaming market from the implementation of such a fee,” it added.
In an op-ed article published on Swedish news site DI, inquiry head Anna-Lena Sörenson cited the potential for further expansion of ATG and other horseracing betting firms through commercial and data agreements.
“At present, such an agreement has only been concluded with its own gaming company ATG. Negotiations have taken place with other gaming companies, but agreement on the level of compensation has not been reached,” Sörenson claimed.
“One explanation is probably that the parties are waiting until the question of a possible market fee has been decided.
“Now that the issue of the introduction of a market fee has been investigated and dismissed, the conditions for constructive contract negotiations between the trotting and galloping sport and companies other than ATG should be more favourable,” she added.
The interim report forms the first part of the government inquiry into gambling market, which was commissioned in June 2018 to examine both horseracing financing and the need for further restrictions on online gambling.
Delivery of the second phase of the report, concerning new online restrictions, was postponed until December 2020 by the Swedish government in July following its decision to impose Covid-19 restrictions on online operators until the end of the year.
Swedish trade association BOS welcomed the first phase of this inquiry, suggesting it was a “sensible conclusion” to the process.
“As a logical consequence, I expect the inquiry to reach the same conclusion when it comes to the closely related question of whether to suggest mandatory levy fees for other sports activities, such as football and ice hockey,” BOS CEO Gustaf Hoffstedt said.
“The inquiry has until 16 December to come to a standpoint regarding that, and I sincerely hope that it stays with the same principles when it is time to decide upon mandatory levy fees on sports betting” he added.