The fragile peace of the regulated Swedish gambling market has shattered. In a bold and controversial move, ATG (Aktiebolaget Trav och Galopp), the state-controlled horse racing giant, has formally lobbied the government to implement a drastic tax increase specifically targeting online casino and commercial gaming.
Drawing inspiration from the recent fiscal crackdown in the United Kingdom, ATG is proposing a tiered tax system that would see duties on online slots and casinos skyrocket, while conveniently leaving the tax rate on horse racing betting untouched.
The proposal has triggered an immediate and furious response from the Association for Online Gambling (BOS) and private operators like Kindred, Betsson, and LeoVegas. They describe the plan as “market suicide,” warning that it will destroy the licensed sector, slash marketing budgets, and hand the market on a silver platter to unregulated offshore casinos.
This article dissects the ATG proposal, the crumbling channelization rates, the “Horse Racing” hypocrisy, and what this means for the future of iGaming in the Nordics.
The ATG Proposal: “Tax Them, Not Us”
ATG, which held a monopoly on horse racing betting for decades and remains the dominant market force, has submitted a position paper to the Ministry of Finance arguing that the current uniform tax rate is outdated.
The “UK Model” Justification
ATG executives are pointing to the United Kingdom as the blueprint. In late 2025, the UK government signaled a move toward a steeply progressive tax on “high-harm” products like online slots (Remote Gaming Duty), aiming for rates as high as 40-50%.
- The Argument: ATG argues that online casinos (slots) carry higher risks of addiction compared to sports betting and horse racing. Therefore, they argue, the state should tax “harm” by raising the duty on online casinos significantly above the current 22%.
- The Exemption: Crucially, ATG proposes that Horse Betting should remain at the current rate (or lower), arguing that it is a “skill-based” activity with lower problem gambling rates and a vital connection to the agricultural economy.
The Bonus Ban
Beyond taxes, ATG is fighting a two-front war. They are also lobbying for a total ban on bonuses for commercial online gaming. Currently, Sweden allows only one bonus per player upon registration. ATG wants even that removed for casinos.
- Strategic Motive: Industry analysts point out that ATG has a massive legacy database of players. They do not rely on acquisition bonuses to get customers. Private operators (like Videoslots or ComeOn), however, rely heavily on bonuses to attract users. A ban would disproportionately hurt ATG’s competitors.
The “Market Suicide” Warning: Channelization in Crisis
The private sector, represented by BOS, has hit back with data that paints a grim picture of the Swedish licensing system.
When Sweden re-regulated in 2019, the government set a Channelization Target of 90%. This means 90% of all gambling money should flow through licensed, taxed, and protected Swedish sites.
- The Reality: According to recent data cited by operators, channelization for online casinos has plummeted to between 74% and 85%.
- The Trend: It is dropping. Every year, more players are leaving the licensed system for the “Black Market” (unlicensed casinos).
The “Price Elasticity” of Gambling
Gustaf Hoffstedt, Secretary General of BOS, has repeatedly warned that gambling is a price-sensitive digital good.
- If Taxes Rise: Operators must lower the Return to Player (RTP) on slots to maintain margins.
- The Result: A licensed Swedish slot pays out 94%. An unlicensed Curacao slot pays out 96-98%.
- The Exodus: Players are not stupid. They notice they lose faster on Swedish sites. They Google “Casino utan Spelpaus” (Casino without Spelpaus) and leave the system.
“Raising taxes on a vertical that is already failing to meet its channelization targets is not policy; it is suicide,” stated a spokesperson for a major Malta-based operator. “If ATG gets their way, the licensed market share will drop below 70%. The state will lose tax revenue, and player protection will vanish.”
The Hypocrisy of the Horse: The 98% Reality
The fiercest counter-argument from the private operators focuses on the “protected species” status of horse racing.
While online casino channelization is leaking like a sieve (74-85%), Horse Betting Channelization sits at a staggering 98%.
- Why? Because ATG has a near-monopoly on the liquidity pools (V75). You cannot bet on Swedish trotting with massive pools on a Curacao site. The product is unique and legally protected.
The “Tax the Horses” Counter-Proposal
Private operators argue that if the government needs money, they should tax the sector that can afford it.
- Inelastic Demand: Because ATG has no real offshore competition, they could theoretically absorb a tax hike without losing players to the black market.
- The Fairness Argument: Why should the failing sector (Casino) pay more while the thriving monopoly (Horses) pays less?
“ATG is using the ‘Public Health’ narrative to crush commercial competition,” notes iGaming analyst Marcus Svensson. “They know that if taxes rise, LeoVegas and Betsson will bleed, while ATG—which derives a huge chunk of revenue from horses—will strengthen its dominance.”
The Shadow of the Black Market
To understand the severity of the operators’ warning, one must look at the Swedish “Black Market.” It is no longer just shady sites; it is a sophisticated shadow industry.
Why Players Leave
Surveys of Swedish players reveal why they abandon the licensed market:
- Bonuses: Sweden limits players to one bonus per lifetime per license. Offshore sites offer weekly reload bonuses, cashback, and VIP programs.
- Game Speed: Swedish regulation mandates a 3-second delay between spins. Offshore sites have “Turbo Mode.”
- Deposit Limits: Sweden imposes strict deposit caps. Offshore sites accept unlimited crypto.
If ATG’s proposal passes and taxes rise, licensed operators will have to tighten their belts further—cutting RTP, reducing the few marketing offers they have, and reducing product investment. This widens the gap between the “boring, expensive” legal product and the “fast, generous” illegal product.
The Payment Cat-and-Mouse
Sweden has tried to block payments to illegal sites, but the rise of Fintech (Revolut, PayPal) and Crypto has made this impossible. A tax hike essentially incentivizes players to learn how to use Bitcoin to get a better gambling experience.
Impact on Marketing and Affiliates
For the marketing ecosystem—media buyers, SEO affiliates, and streamers—the ATG proposal is a “Code Red.”
If the tax on Gross Gaming Revenue (GGR) increases (potentially to 30% or 40%), the Marketing Budget is the first line item to be cut.
The Economics of a Tax Hike
- Current State (22% Tax): For every €100 a player loses, the operator keeps €78. They spend roughly €30 on marketing/affiliates. Profit is slim.
- Proposed State (e.g., 35% Tax): The operator keeps €65. They cannot afford to pay €30 for marketing. They cut affiliate commissions to €15.
Consequences for Affiliates:
- Lower CPAs: The days of €200-€300 CPAs in Sweden will end.
- Strict Retention Budgets: Operators will stop paying for “Re-activation” campaigns because the margins aren’t there.
- The “Black Hat” Pivot: Many affiliates will stop promoting licensed Swedish brands entirely and switch to promoting “Casino utan Licens” (Unlicensed Casinos) where revenue share deals are still 40-50%.
This creates a vicious cycle: The government raises taxes -> Operators cut marketing -> Players don’t see legal ads -> Players find illegal sites via Black Hat SEO -> Tax revenue falls -> Government raises taxes again.
The UK Parallels: A Warning Sign
The Swedish debate is a mirror image of what is happening in the UK. The Labour government’s Autumn Budget in the UK has terrified the industry with talk of doubling taxes on online casinos.
ATG is shrewdly using the UK narrative to pressure Swedish politicians.
- The Narrative: “Look, even the liberal UK is cracking down on slots. Sweden should follow.”
- The Difference: The UK has a channelization rate of over 95%. Their market is robust enough to handle a hit. Sweden’s channelization is already critical (75%). Applying a UK solution to a Swedish problem could break the system entirely.
What Happens Next? The Political Battlefield
The proposal is currently with the Ministry of Finance. Sweden’s right-leaning coalition government is generally pro-business, but they are also under pressure from Christian Democrats to curb gambling addiction.
Scenario A: The ATG Victory
If the government adopts the tiered tax:
- Several mid-tier operators (ComeOn, smaller brands) may exit the Swedish market entirely, viewing it as unprofitable.
- The market consolidates around ATG and Svenska Spel (State Lottery).
- Black market traffic surges to 35-40%.
Scenario B: The Status Quo
The government listens to BOS and Spelinspektionen (The Regulator), who have previously warned that channelization is too low to risk tax hikes.
- Taxes remain at 22%.
- Focus shifts to better enforcement against illegal sites (B2B supplier blocking).
Scenario C: The “Horse Tax” Retaliation
The government decides to raise taxes across the board—including horses—to plug budget gaps. This would be a strategic backfire for ATG.
Conclusion: A Game of Chicken
The Swedish gambling market is playing a high-stakes game of chicken. On one side is ATG, a powerful former monopoly trying to leverage regulatory capture to cripple its digital competitors. On the other side are the private operators, holding the line on channelization and warning that the entire system is about to collapse into the black market.
For the international iGaming community, Sweden is the canary in the coal mine. If a well-regulated Nordic nation destroys its own market through over-taxation, it sends a signal that the “White Market” model is failing.
As 2026 unfolds, all eyes are on the Swedish Ministry of Finance. Will they choose short-term tax grabs, or long-term market stability? The 75% of players still using legal sites are waiting to see if they will be pushed offshore.
