It is not a sustainable financing model that the horse industry receives its financing from the gaming company ATG’s surplus. This risks further strengthening ATG’s already dominant position and cementing the current structure of the horse betting market. This is highlighted by the Swedish Competition Authority in a statement about an investigation into the financing of the horse industry.
On 1 January 2019, it became possible for gaming companies other than ATG to offer betting on horse racing competitions. So far, this re-regulation has not significantly altered the market conditions and ATG continues to have a very strong position when it comes to horse betting.
“The opening up of previous monopolies to competition can lead to less concentrated markets, provided that competition in the market is effective. It is therefore important to nurture newly de-regulated markets by ensuring that competition neutrality prevails,” says Rikard Jermsten, Director General of the Swedish Competition Authority.
The horse industry is currently financed by ATG through the surplus generated by the company. The report “Hästnäringens finansiering på den omreglerade spelmarknaden” (The financing of the horse industry in the re-regulated gambling market) considers this to still be a sustainable financing model, even after the re-regulation of the gambling market.
The Swedish Competition Authority does not share this assessment and believes that the current financing model risks consolidating the current market structure, because it makes the horse industry dependent on a continued strong and dominant position for ATG. In addition, the financing model is based on the assumption that ATG will continue to occupy the same strong market position in the future.
“The fact that the current financing model relies on ATG having a very close connection to the horse industry can entail competitive advantages and contribute to further strengthening the company’s already dominant position. Developing a new model for the financing of the horse industry is therefore of great importance in order to avoid cementing an order in the market that is not competitively neutral,” says Rikard Jermsten.
The Swedish Competition Authority has also commented on the main report "Ökat skydd och stärkt reglering på den omreglerade spelmarknaden" (Increased protection and strengthened regulation in the re-regulated gambling market). In its opinion, the Swedish Competition Authority emphasises that there are strong reasons to continue to examine how Svenska Spel has adapted to the new market situation following the re-regulation of the gambling market. The question of how the group uses common resources in activities that are operated in competition with other actors should also be examined, in order to ensure that competition neutrality prevails between various gaming companies.
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