A difficult performance in the Nordics and Western Europe has seen Betsson report a five per cent dip in revenue for the year’s second quarter, with its sportsbook segment increasing despite a challenging contrasting period due to the football World Cup.
Coming in at SEK 1.27bn (2018: SEK 1.36bn), the group states that “the geographical spread, together with the product mix, explain the good revenue level despite the challenging Swedish market and the decline in the Netherlands”.
Revenue generated from the Nordics and Western Europe declined 17 per cent and 12 per cent respectively to SEK 519.3m (2018: SEK 621.9m) and SEK 392.2m (SEK 443.5m), with Central and Eastern Europe and Central Asia boosted 33 per cent as it reached SEK 284.2m from SEK 214.4m.
Betsson’s casino segment, which contributed 72 per cent of overall group revenue compared to last year’s 76 per cent, amounted to SEK 917.8m (2018: SEK 1.01bn), representing a decrease of ten percent, with mobile revenue up three per cent from SEK 612.4m to SEK 631.1m.
The firm’s sportsbook performance, which came it at SEK 300.2m in 2018 and was boosted by the World Cup, jumped 14 per cent this year to SEK 341m.
Providing a brief insight into its performance during the first half of the year, the online betting and gaming group reports a slight revenue increase of two per cent to SEK 2.6bn with operating income decreasing 12 per cent to SEK 452.1m.
“The gaming industry is facing changes and the second quarter posed challenges”
Pontus Lindwall, president and CEO of Betsson, said of the market challenges posed: “The gaming industry is facing changes and the second quarter posed challenges in several of Betsson’s important markets.
“In Sweden, the SGA revoked one license while other operators have received warnings and fines, including one of Betsson’s operational subsidiaries. Betsson has appealed the fine based on the opinion that the company was operating within the given guidelines.
“As we reported for the first quarter, the operational subsidiaries have made adjustments to the Dutch customer offering to be in a position to obtain a license as soon as possible. Following a negative impact on revenues in direct connection with these adjustments, revenues have stabilised and we are convinced that Betsson is properly positioned for long-term development and growth in the Netherlands.
“Current information does not allow a definite and precise assessment of the timeline of the licensing process, but we welcome the Ksa’s clear ambition to meet a high degree of channelisation. Another market that faced challenges during the second quarter is Norway, where payment blockings make it difficult for operators to offer the customers efficient payment solutions.
“At the same time other markets, locally regulated as well as non-regulated in which we operate, have developed strongly, which proves Betsson’s ability to compete successfully when market conditions stabilise.
“I am confident in my view of Betsson’s capacity and in our strategic opportunities to pursue long-term profitable business with growth and good margins in regulated markets. We also have a geographical spread that compensates for temporary downturns in individual markets.
“During 2018, we took several measures to absorb higher gaming taxes amongst other things and we could quickly show the results of these measures. We have a strong, competent and efficient organisation as well as an efficient cost structure.
“Our proprietary technology enables rapid market adaptations and cost-effective growth. Naturally, the results are affected when several changes in significant markets take place simultaneously, but this does not affect our belief that Betsson is strongly positioned in the industry.
“We have a good financial position and we continuously evaluate additional markets to grow in the future. Betsson’s good cost control and proprietary technology provide good opportunities to meeting market changes and offering competitive product solutions.”