Higher tax and new RG measures hit Svenska Spel as revenue dips in Q3

For the three months to 30 September, revenue at Svenska Spel amounted to SEK1.78bn (£130.2m/€156.5m/$168.9m). This is 9.2% lower than Q3 of last year, according to the operator’s quarterly report.

Reflecting on Q3, Svenska Spel CEO and president Anna Johnson noted the impact of increased gambling tax in Sweden, which was raised from 18% to 22% of gross gaming revenue in July. This, she said, has impacted Svenska Spel in the past two quarters.

Johnson also references the impact of strengthened responsibility measures such as income checks on high-staking players and more welfare calls. Incidentally, since Q2, Svenska Spel has been reporting how much revenue relates to low-risk players, with this at 93.2% in Q2.

“Our strengthened gambling responsibility also affects the group’s revenue negatively,” Johnson said. “It will continue to do so as we plan for more measures going forward. It is a conscious priority because we want sustainable growth – a balance between growth and responsibility. And we do it out of concern for our customers.”

Slight growth in online as other divisions face losses

During Q3, revenue from online gambling increased 2.3% to SEK1.06bn. Online gambling represented 59% of all revenue in Q3, of which 51% came from mobile.

Offline revenue, however, was down 10.3% to SEK595m, while restaurant and bingo halls revenue slipped 25.6%. As already reported, land-based casino revenue plummeted 76.3% to SEK31m following the closures.

Its Tur lottery division – its main revenue source – edged up by 1% to SEK1.22bn, despite fewer draw days than in Q3 of last year. Svenska Spel noted the ongoing appeal of the Eurojackpot game in particular.

However, revenue from the Sport & Casino business slipped 12.4% to SEK447m, mainly due to strengthened gambling responsibility measures. Svenska Spel also noted Q3 has one fewer Saturday than last year, which had an impact its sportsbook’s performance.

Elsewhere, the Vegas gaming machine segment saw revenue drop 25.6% to SEK87m. Again, the operator referenced its responsible gambling work, with this leading to players spending less on slot machines.

Swinging back to Casino Cosmopol, revenue here dropped 76.3% to SEK31m on the back of venue closures. The location in Stockholm remains the only Casino Cosmopol venue still open – although this could change if the government gets its way.

Net profit dips 10.2% in Q3

In terms of spending, expenses were relatively level year-on-year. Direct costs and other external costs increased, but savings elsewhere meant overall spend levelled out.

However, lower revenue meant operating profit declined 4.1% to SEK569m. After accounting for finance-related costs and earnings, pre-tax profit hit SEK567, a drop of 10.4%.

Svenska Spel paid SEK116m in tax, meaning it ended Q3 with a net profit of SEK451, down 10.2% year-on-year.

Slight growth in year-to-date

As for the operator’s performance in the year-to-date, revenue for the nine months to the end of September hit SEK3.24bn. This is 1.5% higher than last year.

Operating profit increased by 3.1% to SEK1.68bn, while pre-tax profit was 0.3% higher at SEK1.74bn.

Bottom line, net profit amounted to SEK1.38bn, an increase of 0.4%.