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Svenska Spel stalls in Q3 due to retail businesses’ woes

| By Richard Mulligan
Sweden’s Svenska Spel has seen revenue and earnings stall as market-wide pressures take their toll on its retail gambling businesses.

In a trading update for the three months to 30 September 2023, Svenska Spel said Q3 revenue was up 1% year-on-year to SEK1.97bn ($177m/€167m/£145m). That stagnation was in line with the Swedish market, which stopped growing in H1 for the first time since mid-2020.

Net gaming revenue for Tur, Svenska Spel’s lottery division and largest business area, was up 2% year-on-year to SEK1.2bn. This growth was driven by the success of its Eurojackpot game.

The biggest percentage rise was seen in Sport & Casino, which was up 4% year-on-year to SEK510m. The growth was driven by a continued increase in active customers, a successful launch of new poker games and online casino growth.

However, the Casino Cosmopol and Vegas business areas saw net gaming revenue decrease by 11% to SEK247m. Svenska Spel said the main commercial challenge for the casino and slots brands is increased competition from online games and restaurant casinos. It has responded by adapting business practices, including new opening times at Casino Cosmopol properties from the start of October.

Online net gaming revenue increased by 6% to SEK1.0bn and now accounts for 53% of total business. Some 44% of the total is via mobile.

Increased costs

The operating profit for the third quarter amounted to SEK686m, an increase of 1% year-on-year. This small rise came despite a SEK35m loss for Casino Cosmopol and Vegas. That was SEK22m greater than the loss seen in Q3 2022. As well as the impact of reduced income, these areas are also experiencing increased costs related to social responsibility and anti-money laundering measures.

Operating costs of SEK724m were in line with the same period last year.

Patrik Hofbauer, Svenska Spel’s president and chief executive, said: “In a time of zero growth, revenues for two out of three business areas grew during the third quarter. Our customer base is growing and the share of healthy revenue is increasing – we therefore have more customers who also play more sustainably.

“We have increased results, high and consistent customer satisfaction, and also high availability of our services.”

Hofbauer announced earlier this month that he will leave Svenska Spel in early 2024. He is leaving to take on the position of president and CEO at Swedish telecommunications company Telia Company.

According to Spelinspektionen figures, the Swedish market saw gross gambling revenue drop by 1% during the three months to 30 June. Commercial online gambling and sports betting, lottery, slots and land-based commercial gaming were all down during the period.

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