Net profit for Aktiebolaget Trav och Galopp (ATG) declined slightly in Q1 of 2022, which the business said was mostly due to a greater focus on higher-cost verticals of non-racing sports and gaming.
Net gaming revenue was exactly stable year-on-year, at SEK1.27bn (£102.6m/€121.9m/$128.9m).
Almost all of this net gaming revenue, at SEK1.06bn, came from online operations, up by 3.5%.
Retail revenue, on the other hand, was down 14.7% to SEK208m.
Looking at net gaming revenue by product type instead, horse racing brought in SEK970m, down 7.4%.
“Despite the decline, the figure is historically high,” ATG chief executive Hasse Lord Skarplöth said.
Sports betting revenue was up 27.3% to SEK177m and casino revenue grew 47.6% to SEK121m.
“We continue to gain market share in Sweden and consolidate our position in sports betting,” Skarplöth said.
Explaining the rapid increase in casino revenue, Skarplöth said that a key factor was the removal of Sweden’s SEK5,000 deposit cap for online casino games.
“We want to create an entertaining and safe gaming experience for those of our customers who play casino,” he added. “An example of this is an expanded range at the same time as we have a mandatory loss and time limit and do not offer bonuses.
“Proof that we have succeeded with our strategy is that our revenue per customer continues to remain at a low level compared to competitors.”
Geographically, SEK1.21bn of the net gaming revenue total came from Sweden and the remaining SEK55m from Denmark.
ATG then made an additional SEK58m, down 9.4%, from agent sales, plus SEK136m, up 1.8%, in other income.
This led to total revenue of SEK1.46bn.
The business then paid SEK259m in gambling taxes, up 2.4% from 2021, and SEK125m in personnel costs, a 7.7% increase.
Other expenses came to SEK641m, up 6.1%, while depreciation and write-down costs ticked slightly down to SEK74m.
This led to an operating profit of SEK381m, which was 12.4% less than in 2021.
After paying SEK13m in tax, the business was left with a net profit of SEK368m, 12.5% less than in Q1 of 2021.
Skarplöth said that the reduced profit was mostly due to changes in its product mix, as costs are higher for sports betting and gaming than for horse racing.
As part of its social responsibility initiatives, ATG also reported the amount of its customers that could be classed as “green”, the lowest risk of harm. It said that 85% of customers, making up 79% of revenue, were part of this group.
“Together with other gaming companies and researchers, we are now working to try to find common key figures that can hopefully become industry standards,” Skarplöth said.