Sweden’s Aktiebolaget Trav och Galopp (ATG) has pointed to growth in its horse racing sector as the key driver in reaching SEK1.3bn (£95.7m/€111.7m/$119.8m) in net gaming revenue (NGR) during Q1.
Revenue is the highest ATG has ever recorded in a Q1, as well as a 9.2% increase on the same quarter last year, when it reported SEK1.19bn in NGR.
That revenue growth was primarily down to increases in ATG’s horse racing sector, which was responsible for SEK968m in NGR, or 74.5% of the company’s Q1 total. That figure was also 13.3% ahead of the SEK854m in NGR accumulated by the horse racing sector in Q1 2023.
Casino also saw an increase of 13.8% year-on-year, with SEK165m in NGR generated from the sector in Q1. The growth in horse racing and casino helped to offset decreases in sports betting, which reported SEK173m in NGR, 10.8% behind last year’s Q1 figure of SEK194m.
ATG attributed poor sports betting performance down to “player-favourable” sports results during the quarter.
Lotta Nilsson Viitala, ATG’s chief financial officer, believes the company’s Q1 performance was a strong one considering the current recession. Viitala also explained the reasons for the horse racing growth, as well as its importance to ATG.
“In addition to positive calendar effects with an early Easter weekend, we had more jackpots on our major gaming brands than during the same period last year,” Viitala said. “For horse racing, we also had a weak Q1 in 2023 with a very good first quarter in 2024, which contributes to the strong increase in the comparison.
“Being an efficient company and having a high result is important to us because ATG is and must remain the driving force in the Swedish horse industry.”
Costs also up for ATG in Q1
Total revenue for Q1 reached SEK1.5bn, up over 9% from Q1 2023. This is despite costs rising SEK50m to SEK1.1bn including tax.
ATG attributed the increase in costs to its increased NGR and its subsequent effect on tax, costs rights as well as commissions. The company also outlined that its second highest cost item following tax is equestrian information and rights, an expenditure that increases when horse racing betting increases like it did during Q1.
ATG’s operating profit for Q1 stood at SEK389m, up SEK72m from the same quarter last year, while operating margin also increased from 23% to 26%.
The number of active customers rose from 1.3 million to 1.4 million, and Viitala believes ATG’s strong customer base places more responsibility on the company to protect them from irresponsible play.
“ATG has many and committed customers and it is very important to us that they feel good about their gambling,” Viitala continued. “We therefore continue to develop our gambling responsibility in different ways.”
Strong 2023 carrying over despite black market threat
ATG’s upwards growth trajectory it displayed in 2023 looks set to continue with a solid Q1 report. Last year, ATG reached SEK1.45bn in net profit, up 7.5% from 2022. Net gaming revenue also edged up by 0.9% to SEK5.27bn.
However, ATG has also noted what it described as “worrying” channelisation rates in Sweden as a potential threat.
Its Q4 channelisation report estimated igaming channelisation rates to be around 69%-82%. Those numbers are way off the 90% target set by the Swedish government.
That channelisation rate has now fallen in consecutive quarters since Q3 2023, and ATG also highlighted that unlicensed operators’ visitor traffic has increased tenfold since 2019.
