Svenska Spel online revenues up 9%
During the third quarter, the Svenska Spel Group’s operations will be further stabilized following the year-end’s major transition to a new gaming market. Svenska Spel’s digital business and customer bases continue to develop positively.
However, revenues are affected by the increased competition and efforts in gaming responsibility. This is shown by Svenska Spel’s interim report January – September 2019, which is presented today.
It is positive that our customer bases and our digital business continue to grow. But even though we have stabilized Svenska Spel’s operations after the changes at year-end, the result is not yet at the level we are striving for. We have an aggressive focus going forward, for example through investments that contribute to enhanced customer experience and data-driven customer communication, but with continued concern for our customers, ”says Patrik Hofbauer, President and CEO of Svenska Spel.
Net gaming revenue decreased to SEK 2,001m during the third quarter, which is five percent lower than the same quarter last year. The net operating margin of 32 percent is considerably lower than the previous year due to the new gaming tax. With adjustment for game tax, it amounted to 50 percent (55).
The Sport & Casino business area – which operates in the online gambling and betting market – is down two percent compared to the same quarter last year. The business area Tur also decreases by two percent, while the business area Casino Cosmopol & Vegas decreases by just over 16 percent. The results for Casino Cosmopol & Vegas are affected by customers’ move from physical play to online, but also by efforts linked to the duty of care and money laundering legislation.
We can see that the gaming industry is being squeezed by lower revenues in 2019. Part of the explanation lies in the changes brought about by the new game regulation, in particular the national suspension register Game Break and deposit limits. These are positive changes as they protect consumers and build a long-term sustainable industry through sound revenue, ”says Patrik Hofbauer.
Svenska Spel’s digital business increased by nine percent compared to the same quarter last year, of which sales in mobile phone increased by just over 13 percent. The digital business accounts for 37 percent of the Group’s net gaming revenue during the quarter.
Customer bases continue to grow. For the Tur business area, the customer base is back to the level it was in 2018 before the division of the Group and the transition to separate gaming accounts. Customers also return to the Sport & Casino business area, but the recovery takes longer than expected.
On the product side, the Sport & Casino business area has expanded its range with, among other things, more tables in the live casino and the new game Football Studio 1X2. The poker has been updated so that customers can play directly on the web without downloading software. The offer on sports betting is being developed through the collaboration with SBTech as supplier of a new sports book, which is expected to be in place in 2020.
Among other things, the Tur business area has launched a new Trisslott with the opportunity to win SEK 5,000 a week for 65 years, and has also simplified for customers to play Lotto, Eurojackpot, Keno and Vikinglotto online with a new interface. During the quarter, the Casino Cosmopol & Vegas business area continued to replace old Vegas machines with new ones that contain a strong consumer protection. So far, about 3,100 of over 4,400 vending machines have been replaced. Casino Cosmopol in Gothenburg is being rebuilt to become one of Europe’s best and most modern.
Net gaming revenue for the Group amounted to SEK 2,001m (2,125), a decrease of 5 percent.
Online continues to grow by 9 percent, of which mobile is up 13 percent.
Operating income for the Group amounted to SEK 639 M (1,176), a decrease of SEK 536 M, of which SEK 377 M consists of gaming tax.
Profit for the Group amounted to SEK 1,222 million (1,176), an increase of SEK 48 million.
The operating margin (net) was 32 percent. With adjustment for game tax, the operating margin was 50 percent (55).
The rollout of new Vegas slots with enhanced gaming responsibilities continues, approximately 3,100 out of a total of 4,400 have been replaced and all should be replaced by the end of the year.
Deferred tax assets have been reported with SEK 687 million as of September 9, 2019 and relate to differences between book values and tax values of intangible assets.