BOS, the Swedish Trade Association for Online Gambling, has backed the Gambling Market Inquiry’s decision to oppose a possible horse racing tax.
Horse racing industry leaders in Sweden see a plan to enact a 5 percent betting tax as a way to allocate funds to the industry.
The Gambling Market Inquiry, on the other hand, dismissed the plan in its entirety, a move that BOS has endorsed.
Rejection due to principle and practical reasons
Gustaf Hoffstedt, Secretary General of BOS said: “We agree with the Gambling Market Inquiry’s conclusion to reject this proposal. We do this based on both principal as well as practical reasons.
“A principal reason is that you cannot own, and consequently not charge for, information that is open to everyone.
“This includes results that are often used in various types of betting. A practical reason is that the proposed market fee would be as large as the entire gross gaming revenue.
“Everything that remains after the winnings have been paid out to the winners would have to go to cover the levy fee. Few gaming companies would be interested to operate under such conditions.”
Betting levies in other jurisdictions
Investors have been charged with investigating the implementation of betting levies in other jurisdictions, with a special focus on the horse racing markets of the UK and Denmark, according to the official report of the Gambling Market Inquiry.
The ‘reasons and background’ for the implementation of a betting tax in these markets, on the other hand, ‘differ from Swedish requirements,’ leading the Inquiry to argue that a statutory fee for horse racing was not acceptable.
Furthermore, the Inquiry stated that the new monetary support system for Swedish racing, in which surplus income from the trotting and galloping sports’ own operator ATG are funnelled back into the industry, is a “sustainable financial model.”
This model, it was argued, has been boosted by ATG’s position as a leading player in Sweden’s betting industry, as well as in the broader Scandinavian area, following the purchase of a Danish gaming company, resulting in a rise in net gaming revenues starting in 2019.
‘Good economic conditions’
In addition, if business dynamics in Sweden improve, the horse racing industry will be in ‘good economic conditions’ to enter into broadcast licences, sponsorship, and sports data deals, equivalent to other sports, according to additional comments.
Investors, on the other hand, believed that this was still impossible due to ATG’s “competitive advantage” over other well-known brands and betting pool operators.
An impartial inquiry led by Social Democrat MP Anna-Lena Sörenson on behalf of Sweden’s Rikstag has previously dismissed the obligatory Swedish racing levy plan.
The investigation was ordered as a condition of Sweden’s re-regulation of its online gambling industry, with Sörenson charged with assessing market conditions and responsibilities after the first year of proceedings.