Editor’s Take

Why this matters: The unity of the Swedish regulated market is fracturing. While the industry usually stands together against black market threats, ATG (the former state monopolist) has broken ranks by advocating for higher taxes on its competitors (casinos) while seeking a tax cut for its own core product (horse betting). BOS’s response is significant because it elevates the argument from “bad policy” to “illegal act.” By invoking EU State Aid rules, BOS is signaling that any government attempt to favor ATG will face immediate litigation in Brussels.

The Full Story

The conflict between Sweden’s commercial operators and the former horse racing monopoly ATG has escalated into a debate over European Union law.

Following a controversial op-ed by ATG CEO Hasse Lord Skarplöth in Dagens Industri (DI) on December 19, the Swedish Trade Association for Online Gambling (BOS) has issued a sharp rebuttal. BOS Secretary General Gustaf Hoffstedt argues that ATG’s proposal—to raise the general gambling tax to 26% while lowering the tax on horse betting to 18%—would likely be deemed illegal under EU state aid rules.

The ATG Proposal In his initial column, Skarplöth argued that the Swedish government should abandon a flat tax rate. He proposed increasing the tax burden on online casinos and sports betting to 26%, while simultaneously requesting a tax reduction for horse betting products to 18%. ATG argues this differentiation better reflects reality and protects the funding of the Swedish equine industry.

BOS: “A Legal Dispute with the EU” In a response published in Dagens Industri on December 22, Gustaf Hoffstedt rejected the proposal on two fronts: commercial viability and legal compliance.

While BOS has long argued that raising taxes will destroy channelisation rates (driving players to the unlicensed market), Hoffstedt’s newest argument focuses on competition law. He asserts that because ATG holds a de facto monopoly on horse betting, a tax break specifically for that vertical is a direct subsidy to a single company.

“In addition to weakening the competitiveness of the legal licensing system… a system with a differentiated gambling tax would place Sweden in a legal dispute with the EU. We should avoid that,” said Hoffstedt.

The Monopoly Argument Hoffstedt points out that while the Swedish Gambling Act technically allows other operators to apply for horse betting licenses, the reality is different. ATG retains exclusive access to pool data and direct connections to trotting and galloping tracks. Furthermore, ATG had 45 years of monopoly protection to build liquidity in its pools, creating a network effect that competitors cannot realistically challenge.

Therefore, BOS argues, a tax cut for “horse betting” is, in practice, a tax cut exclusively for ATG.

“If a benefit can in practice only be used by a single company, it is selective in the sense of state aid law,” Hoffstedt explained. “Against this background, a differentiated gambling tax for horse racing would mean that the state, through the tax system, provides an economic advantage that can in reality only accrue to a single company.”

Debunking the UK Comparison Skarplöth previously cited the United Kingdom as an example of a jurisdiction with successful differential taxation. Hoffstedt dismissed this comparison as “misleading.” In the UK, the market for horse betting is competitive, with multiple operators offering bets on equal terms. In Sweden, the structural advantages held by ATG make such competition impossible.

The Ultimatum: Open the Pools or Keep Taxes Flat BOS concluded with a challenge to ATG and the government. If ATG wants a unique tax bracket, it must surrender its unique market position.

“The uncomfortable but necessary conclusion for ATG is therefore clear. You cannot both maintain the current special status for horse racing and at the same time introduce a differentiated gambling tax,” Hoffstedt wrote.

He outlined that for a differential tax to be legal, ATG would need to open its betting pools to other companies at neutral compensation levels. If ATG wishes to keep its pools closed, “taxation must continue to be the same for all gambling products.”

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