Photo credit: Telenor
- Svenska Spel posted weaker H1 results for 2019
- Regulatory changes have occasioned the poorer results
- Nearly 50% of the net profit was wiped
Svenska Spel has posted 50% less net profit for H1, 2019. The company’s CEO Patrik Hofbauer has welcomed the regulatory changes that have helped create a better player environment nevertheless.
Svenska Spel’s H1 Results Dip, Regulations Tightens
Svenska Spel, Sweden’s national sports betting and gaming operator, saw its profits tumble amid growing regulatory measures directed chiefly against competitors who haven’t complied with the existing gaming statures.
The first half results weren’t as bad, but net profit was lower year-over-year, although customer growth restarted in the second quarter, after the excitement of a multitude of new operator had subsided.
Over the first six months of 2019, results reached SEK4.1 billion, approximately $437 million, which was 4% lower. Svenska Spel’s online segments were under significant pressure from competitors, but the company’s sportsbook continued to expand online.
Sport & casino revenue continued to grow in the first half year, hitting 5% better results than a year before. This was mostly occasioned by the launching of fresh casino offers as well as horse racing. Interestingly, revenue in sports betting fell, which was chalked up, once again, to the sudden influx of new rival brands.
During the same time last year, Svenska Spel was reporting some decent results. What has occasioned the latest performance?
Posting Great Results Despite the Competition
Svenska Spel’s lottery segment showed great numbers, being the only one to generate significant positive results. Yet, the results were still lower than a year before, with revenue falling behind 3% to SEK2.2 billion over the period.
Casino Cosmopol, the flagship property owned by Svenska Spel also posted 14% lower revenue which plummeted to SEK849 million. Yet, the company seems to foresee better times ahead, following the full transition to a full digital market. Here is what Patrik Hofbauer, CEO at Svenska Spel, had to say commenting on the recent developments:
“The customers we lost at the end of the year as a result of splitting the group into new divisions, and the transition to separate customer accounts for each have found their way back to us. We are pleased that customers choose Svenska Spel, because they appreciate our products, and because it is safe and secure to gamble with us.”
Plus, Svenska had to pay quite a bit in tax. The company ended up contributing SEK783 million to the state coffers. After all expenditures were accounted for, the bottom line was a rather disheartening SEK1.1 billion, or a 50% drop in profits.
Svenska Spel and Hofbauer in particular recognized the efforts of the national regulator, the Spelinspektionen,to improve customer protection. While this has clearly taken a toll on the operations of the company, it has also helped create a gambling climate that promises better consumer protection across the board. The regulator awarded licenses earlier this year, four months after the official launch of the industry.
The Spelinspektionen has already had to suspend several licenses in the cases of Ninja Casino and Global Gaming licenses. Sweden is similarly considering to suspend all gambling advertising as the watchdog hasn’t been happy with the practices demonstrated by operators.