ATG is calling for Sweden to increase the general gambling tax rate to 26% while applying a reduced 18% rate to horse racing betting, citing the recent UK approach as precedent. BOS contends the proposal would both undermine the regulated market and provide ATG with an unfair competitive advantage.
State Aid Concerns Enter the Debate
The clash, which has played out in opinion pieces in Sweden’s business publication Dagens Industri, centers on whether a differentiated tax structure would constitute selective state support under EU competition law.
ATG chief executive Hasse Lord Skarplöth argued in a 19 December opinion piece that Sweden should adopt a split-rate system, with most licensed products taxed at 26% and horse betting at 18%. Three days later, BOS secretary general Gustaf Hoffstedt responded that such a structure would directly conflict with EU competition rules if it primarily benefits a single operator.
“In addition to weakening the competitiveness of the legal licensing system, by creating additional incentives for gambling consumers to choose the zero-taxed unlicensed gambling market, a system with a differentiated gambling tax would place Sweden in a legal dispute with the EU. We should avoid that,” Hoffstedt stated.
BOS argues that while Sweden’s gambling legislation does not formally prevent other operators from obtaining horse betting licenses, ATG’s dominant market position—built through decades of exclusive pool access, racecourse integration, and established betting products—means a lower tax rate would effectively constitute selective support. This transforms what appears to be a policy discussion into a potential state aid issue under EU law.
ATG Defends Differentiated Approach
ATG rejects the argument for uniform gambling taxation, positioning horse racing betting as fundamentally different from other gambling products. Skarplöth characterizes horse betting as tied to employment and regional economic activity, unlike online casino games that can be provided from any location.
“Online casino is a detached digital product. Horse betting is not,” Skarplöth said.
The operator contends that Sweden’s gambling policy has become overly focused on channelization—the percentage of gambling activity occurring through licensed operators—and should incorporate broader social and economic considerations, including funding for the country’s trotting and galloping sectors.
“The channelisation argument against a differentiated gambling tax was relevant before. Today it is not enough,” Skarplöth stated.
ATG also cited financial pressure from Sweden’s July 2024 tax increase, which it says reduced the company’s annual contribution to equestrian sports by approximately SEK 200 million (€18.6 million).
The operator’s broader position is that gambling products should be taxed according to their risk profile. Skarplöth points to the UK’s differentiated approach as a model, arguing Sweden should similarly distinguish between “higher harm” products and those considered lower risk, rather than treating all gambling uniformly.
BOS counters that the UK comparison is misleading because Britain maintains a competitive horse betting market, whereas Sweden’s structure leaves ATG in a dominant position that competitors cannot realistically challenge.
Channelization and Consumer Protection
Both parties frame their positions around consumer protection, a central concern in Sweden since the 2019 re-regulation that established the current licensing framework.
BOS and the online operators it represents argue that increasing costs for licensed gambling will drive players to offshore sites that pay no Swedish tax and operate outside Sweden’s consumer protection framework. Hoffstedt has consistently maintained that channelization underpins the entire regulatory model.
“Channelisation is the mother of all other challenges,” Hoffstedt said in a recent interview with SiGMA News, warning that stricter rules and higher costs can become counterproductive if they make licensed gambling less competitive than unlicensed alternatives. “Consumer protection is completely worthless if the consumers are not present.”
ATG disputes the assertion that higher taxation automatically reduces channelization, noting that multiple factors influence consumer behavior and pointing to policy measures targeting unlicensed operators. Skarplöth argues Sweden can strengthen enforcement while using taxation to reflect varying risk levels and social benefits.
BOS maintains the proposed horse betting carve-out contradicts channelization logic: horse betting already achieves very high channelization rates, while online casino—the category most vulnerable to offshore competition—is where Sweden faces the greatest challenge keeping players within the regulated system.
Political and Legal Outlook
Sweden’s government has not publicly committed to ATG’s differentiated tax proposal. However, the dispute is intensifying, with BOS now framing a split-rate structure as not only flawed policy but a potential legal liability that could trigger EU enforcement action.
The debate highlights the tension between supporting domestic industries and maintaining competitive neutrality in regulated gambling markets, particularly in jurisdictions operating under EU state aid rules. How Sweden resolves this question could have implications for other member states considering similar approaches to gambling taxation.
Source: SiGMA News
