In a regulatory climate marked by heightened scrutiny and strategic adaptations, Svenska Spel’s third quarter of 2024 presented a mixed bag of results. As disclosed in their latest interim report, the company observed a robust increase in customer engagement, yet faced a downtrend in overall revenue, predominantly influenced by legislative changes and the ongoing restructuring within their operational framework.
Challenges across business sectors:
Anna Johnson, the president and CEO of Svenska Spel, a Swedish operator, pointed out the nuanced impacts of their sustained commitment to responsible gaming. “The percentage of healthy income continues to increase to 94 percent during the third quarter. The reason is that our concern for customers with a focus on sustainable gaming is effective,” Johnson explained in the company’s press release. However, she acknowledged the financial strain this focus imposes on the group, projecting further impacts as they continue to enhance their responsible gaming measures.
The quarter saw a notable downturn in the net gaming revenue, with a 9% decline year-on-year, amounting to SEK 1,784 million, down from SEK 1,965 million. This reduction was largely due to a dramatic decrease in the Casino Cosmopol sector, which shrunk by SEK 100 million or 76%, operating only one casino compared to three in the previous year. Other areas, such as the Sport & Casino and Vegas sectors, also experienced downturns due to the intensified gambling responsibility initiatives, albeit contributing positively to the ‘healthy’ revenue metrics.
Conversely, the Tur business area showcased resilience with a slight 1% increase in net gaming revenue, buoyed by popular offerings like Eurojackpot and Triss. This sector’s stability helped offset some of the financial pressures elsewhere in the company.
Despite the lower income across various sectors, overall cost reductions across the company contributed to maintaining a steady operating margin of 35%. Yet, the group’s operating profit still fell by 9% to SEK 627 million, significantly impacted by a new gaming tax increase from 18% to 22% initiated in July, which alone carved SEK 70 million from the quarter’s profitability.
Technological innovations and market adaptations:
In response to evolving market conditions and customer preferences, Svenska Spel has not only streamlined its operations but also introduced innovative product offerings. Noteworthy among these is the Stjärnvinsten, a new promotional lottery that allows customers to win substantial prizes, enhancing the gaming experience. Additionally, the company launched a revised sports betting platform for Oddset, improving user interactions and betting options.
Beyond financial metrics, Svenska Spel continued to demonstrate its commitment to social responsibility. The quarter highlighted the distribution of 55 million winnings in a number of games and lotteries, with a notable jackpot of over SEK 250 million in Eurojackpot. The company also awarded 52 new elite sports scholarships, underscoring its support for integrating elite sports and academic pursuits.
