Betsson’s record Q3 comes at a price
Betsson’s third quarter brought more active customers and more revenue than ever, but profit fell sharply from a year earlier. Speaking exclusively to iGB, chief executive Pontus Lindwall explains what is squeezing margins, and why he believes earnings are now moving in the right direction.
Group revenue reached €326.5 million in Q3 2026, up 10% from €295.8 million, with Rhino Entertainment Group consolidated from August.
EBIT fell 31% to €46.1 million and the margin narrowed to 14.1% from 22.6%. EBITDA dropped 23% to €63.4 million. Net income fell to €28.2 million from €50.1 million (EPS €0.19 vs €0.34), and operating cash flow slipped to €54.5 million from €64.8 million.
Lindwall urges investors to focus on the sequential trend. EBIT rose 9% on Q2, its second consecutive quarterly increase, and the margin improved from 13.6%. “Maybe the most important thing for an investor is that we increased EBIT sequentially,” he says. “So it’s important that we are now growing EBIT again.”
He will not, however, put a date on a return to year-on-year earnings growth: “It’s hard to tell when we will see profit growth compared with the same quarter last year. I don’t know that yet, but we are certainly moving in the right direction.”
A lower-margin model
Gross profit fell €9 million to €181 million and gross margin slid to 56% from 64%. Revenue from locally regulated markets grew 35% and now makes up 78% of the total, up from 64%. That growth lifted gaming taxes by around €28 million to a record.
Asked whether a Latin America-heavy Betsson is simply a lower-margin company, Lindwall replies: “Yes. We are now growing a lot in Latin America, in a couple of regulated B2C markets. Those come with a different cost structure and, most importantly, a different tax structure.”
Latin America leads record growth
Latin America, the largest region at 36% of revenue, grew 52% to a record. Active customers rose 40% to almost 1.9 million. On the World Cup, Lindwall says: “It lifts volumes a bit, but even more so it lifts the number of active users, and that’s important. So I hope we can manage to keep some, or most, of those customers going forward.”
Western Europe grew 14% to its best quarter yet, led by Italy, and Rest of World more than doubled on Rhino’s Canadian business. Central & Eastern Europe and Central Asia fell 17% on lower B2B licence income, and the Nordics declined 10%.
Casino revenue rose 14% to an all-time high and made up 77% of revenue. Sportsbook revenue grew just 1% to €72 million as the sportsbook margin slipped to 8.1% from 8.8%.
B2B steadies as regulatory risks mount
B2B revenue fell 39%, or €30 million, on lower income from one customer, while B2C grew 28%. B2B now accounts for just 14% of revenue and also dipped slightly from Q2.
The CEO names stronger B2B growth as his one wish for the quarter and says the decline at the largest customer has stabilised: “We don’t know what it will look like in the future, but we certainly hope it will continue to build up from here.” He says technology assets acquired with Rhino will “fuel our B2B business going forward”.
On regulation, Lindwall says some proposed Latin American taxes “prove that regulators don’t really understand the business, because they would make it impossible to run”, adding: “Any kind of tax on turnover doesn’t really work for this industry.”
Betsson kept its investment in Brazil small, so it was largely unaffected by the country’s near-ban on online gaming. He calls the ban “a shocking decision” and expects change: “No country has managed to shut down internet gaming and get away with it.”
Ready for deals, debt and prediction markets
Net cash stood at €98.3 million at the end of September, down from €220.0 million a year earlier, after around €59 million was spent on Rhino. Lindwall says that his company is keeping a close look at the market: “We could do a sizeable deal,” he says. “And given the structure of our balance sheet, we wouldn’t be afraid to take on some more debt to do a bigger acquisition.”
He is also enthusiastic about prediction markets, even though regulation rules them out in most of Betsson’s markets. Asked whether he would press a button to create a regulated framework in Europe, he is unequivocal: “Yes, I would definitely press that button. In certain high-tax jurisdictions, we would then have another product with the same offering but lower tax. So that would be interesting.”
Strong start to Q4
Average daily revenue in Q4 up to 18 October was 11% above the Q4 2025 daily average, despite a sportsbook margin well below its eight-quarter average. Nine-month revenue stands at €922.1 million, up 3%, with EBIT down 39% to €122.3 million.