Betsson has reported another record period of operations in the third quarter of 2024, with casino revenue being the driving force behind the growth, rising by over 20% year-over-year.
Customer activity also reached a new all-time high for the operator with deposits increasing by almost 20%, while operating income (EBIT) achieved an 11th consecutive quarter of sequential growth.
New revenue and EBIT highs
Publishing its Q3 results, Betsson reported a group revenue increase of 18% compared to the same period last year to €280.1m (Q3 2023: €237.6m). In constant currencies and adjusted for acquisition, revenue rose by 50.6% YoY. Share of revenue from locally regulated markets (€163m) increased to 58% (2023: €106m/45%).
Licence revenue for system delivery to B2B customers stood at €66.7m (2023: €55.9m), with new customers added and further sportsbook trading capabilities achieved through the 2022 acquisition of KickerTech, in addition to improvements and investments in casino and sportsbook products.
Customer activity rose in the quarter, with deposits rising by 19.8% YoY and reaching an all-time high of €1.48bn (2023: €1.24bn). Registered customers grew to 31.1 million, up 5.9% (2023: 29.4 million), while active customers increased by 9.8% to 1,357,953 (2023: 1,237,238).
Betsson’s EBITDA rose by 17% YoY to €80.3m (2023: €68.9m) with a margin of 28.7% (2023: 29%). EBIT increased by 15% to €64.5m (2023: €56m) with a margin of 23% (2023: 23.6%).
Net income fell slightly to €43.4m (2023: €46.2m) with earnings per share at €0.31 (2023: €0.35). Operating cash flow at the end of the quarter was €62.5m (2023: €44.9m), while net debt was €-128.3m (2023: €-65.5m).
“Yet again new record levels in revenue and EBIT in the third quarter,” commented Pontus Lindwall, CEO of Betsson.
“The high customer activity continued during the third quarter with new record levels in customer deposits and gaming turnover. Yet again Betsson reports quarterly records in revenue and EBIT, which means the eleventh quarter in a row with sequential growth on the EBIT level.”
Casino drives Q3 growth
All of the operator’s verticals saw growth in Q3 when compared to the previous year. Casino revenue was the main driver in terms of revenue share at 75% (2023: 74%), followed by sportsbook revenue at 24% (2023: 27%) and other products revenue (poker, bingo and other) at 1% (2023: 1%).
Betsson reported a new all-time high for casino revenue in Q3 of €209.9m, up 22% YoY (2023: €172.1m), with the operator expanding its offering with 359 new games during the period – 27 of which had brand exclusivity – as well as its live casino titles. Gross turnover for the vertical also reached a new high of €9.42bn (2023: €8.29bn).
For sportsbook, revenue stood at €68.3m, up 7.8% YoY (2023: €63.3m). Gross turnover rose by 18.7% to €1.55bn (2023: €1.31bn) while the margin was 7.4% (2023: 7.3%). During the quarter, new sports were launched in its betbuilder function within the sportsbook, as well as new features to strengthen cross-selling between sports betting and casino.
In July, Betsson’s operational subsidiary entered into a four-year sponsorship deal with Italian football club Inter, with the team’s shirts featuring the Betsson.sport logo on the front.
Lindwall noted: “A lot of preparatory work was done before this summer’s major football tournaments, so I am particularly pleased to see the 100% uptime for the sportsbook during all the matches in both the Euros and Copa America.
“In August, an agreement was entered with the French gaming operator FDJ about the acquisition of Sporting Solution, which for many years has been an important supplier of trading, pricing, and sports betting risk-management services to Betsson’s sportsbook.
“The acquisition will primarily contribute with faster and more flexible odds setting, stronger risk management and enhanced scalability for the sportsbook product for both B2C and B2B.”
Other products revenue stood at €2m (2023: €2.1m).
Nordics impacted by lower casino activity
Per region, Betsson reported growth in all regions except for the Nordics. Central & Eastern Europe and Central Asia (CEECA) operations led the way in terms of revenue share at 42%, followed by Latin America with 25%, both the Nordics and Western Europe with 16%, and the Rest of the World (ROW) with 1%.
Nordics revenue dropped by 1.8% in comparison to the same period the previous year to €45.3m (2023: €46.1m), primarily driven by lower casino activity.
CEECA revenue reached a new record of €116.3m, up 20% YoY (2023: €97m), driven by increased underlying casino activity. Operations in Croatia and Greece reported all-time revenue highs, while Estonia, Latvia and Lithuania achieved YoY growth. Revenue in Georgia dropped due to lower casino activity and sportsbook margin.
Latin America revenue rose by 34.2% to €69.4m (2023: €51.7m), an all-time high driven by casino. Revenue in Argentina, Peru and Colombia increased in comparison to the same quarter the previous year. In Peru, an operational subsidiary obtained a local licence in July for the Inkabet brand, in addition to the licences for the Betsson and Betsafe brands acquired in June.
Western Europe revenue increased by 14.2% YoY to €44.7m (2023: €39.2m), driven by casino. Operations in Italy reported an all-time revenue high with strong underlying growth and new records in active customers, deposits and turnover. Sportsbook activity and revenue in the country increased as well.
Belgium’s revenue rose in comparison to the same quarter last year as well thanks to casino, but Betsson did note that a new online casino offering was launched in the country back in January. The operator also increased its ownership in its French joint venture company Betsson France during the quarter from 49% to 67%.
ROW revenue grew by 22.9% YoY to €4.4m (2023: €3.6m), driven by casino.
Q4 and beyond
Looking ahead, Lindwall reported that Q4 is already off to a positive start in terms of daily revenue, while also providing an update on the company’s 2022/2025 bond and the company’s thoughts on Brazil ahead of its market launch at the beginning of next year.
The CEO stated: “Our business continues to generate strong cashflows and the balance sheet is solid. In September, we refinanced the 2022/2025 bond with a new three-year senior unsecured bond of EUR 100 million at a floating rate of 325 basis points above EURIBOR, which is half the credit spread compared to the refinanced bond.
“After several years of delay, Brazil will introduce a new gaming regulation in January 2025 and during the past quarter we submitted our application for a local licence. The potential market in Brazil is large while competition is expected to be tough with many operators willing to invest large amounts in marketing.
“As always for Betsson, we will carefully evaluate and compare the likely returns on marketing in Brazil with other countries in order to find the right mix and allocation of investments between our markets. The focus on efficient capital allocation is and has always been an important part of our strategy to create shareholder value.
“The fourth quarter is off to a positive start with 14% higher daily revenue than the average for the full fourth quarter last year. Hence there is reason to feel confidence about the last quarter of the year, which is usually also the seasonally strongest quarter for customer activity.”