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Swedish limits hit ATG casino revenue in Q3

| By Robert Fletcher
Sweden’s AB Trav och Galopp (ATG) posted year-on-year growth in revenue for the third quarter of 2020, though its online casino performance was dragged down by Sweden’s new spending limits for customers.

Net gaming revenue in the three months to 30 September totalled SEK1.38bn (£120.4m/€133.3m/$157.6m), which represented an 18.3% rise on SEK1.17bn in the same period last year.

ATG said this increase was down to growth within core its core horse racing betting business, supported by growth in sports betting in a period that saw live action resume around the world.

Horse racing betting revenue climbed 17% year-on-year to SEK1.19bn, and accounted for 88% of the quarterly total. The vertical has performed strongly during the novel coronavirus (Covid-19) pandemic, as Swedish racing was allowed to continue at a time when other sports were suspended.

Sports wagering revenue jumped by 59% to SEK113m and represented 8% of Q3 revenue.

Casino revenue, on the other hand, fell 6% to SEK78m, something the operator blamed on the introduction of an SEK5,000 weekly deposit cap and limits on bonuses that came into effect from 2 July. This saw Sweden’s casino contribution fall to SEK58m, something that was partially offset by an increased contribution from ATG’s Ecosys subsidiary in Denmark.

“During the third quarter, we saw a clear slowdown in casino gambling in Sweden,” ATG’s chief financial officer Lotta Nilsson Viitala said. “This is a consequence of the temporary regulation, which means our casino customers must set a mandatory deposit limit per week.

When also taking into account additional income from agents and other sources, total revenue for the period amounted to €1.60bn, up 15.2% on the previous year.

In terms of spending in Q3, personnel costs remained level at SEK112.0m, with other expenses falling 2.2% to SEK542.0m. Gambling tax amounted to SEK266.0m, while depreciation and write-downs of intangible and tangible fixed assets costs hit SEK71.0m, up 29.1% on last year.

This left ATG with an operating profit of SEK618.0m, up 37.6% on Q3 of 2019, and after taking into account financial items, profit before tax was SEK624.0m, 38.7% more than last year.

ATG paid SEK52.0m in income tax during Q3, which left it with a total profit of SEK572.0m for the period.

Turning to ATG’s year-to-date performance, net gaming revenue in the nine months to the end of September reached SEK3.92bn, up 20.3% on the same period last year.

Horse racing net gaming revenue stood at SEK3.37bn, an increase of 18.0% on 2019, while sports betting revenue amounted to SEK261.0m and casino revenue SEK285.0m.

Total revenue for the period, including rights fees for racing coverage and revenue share from sales agents, was up 20.0% year-on-year to SEK4.70bn.

Outgoings for the year stand at SEK3.0bn in the nine months, a SEK167.0m rise from 2019.

Operating profit for the nine months to 30 September amounted to SEK1.64bn.

After financial items and taxes, ATG’s net profit for the year stands at SEK1.54bn for the period, a 53.4% year-on-year increase.

“The ongoing pandemic of course affects our business and our customers,” Viitala said. “A lot is different now, but our customers have appreciated the exciting and smooth gaming experience our employees have delivered.”

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