Swedish igaming revenue declines in third quarter

29 October 2019

The Swedish Gaming Authority (Spelinspektionen) has reported a 3.4% quarter-on-quarter decline in online gambling revenue for the Q3, ahead of it publishing full results for the period.

Online gaming and betting revenue for the three months to 30 September 2019 came in at SEK3.35bn (£268.6m/€310.9m/$344.4m), down from SEK3.47bn in the second quarter.

The Q3 figure is also lower than the SEK3.42bn that was recorded in the opening quarter of the year, the first period of regulated online gambling in Sweden.

Spelinspektionen did not reveal any more figures for the quarter at this stage, but it did say that it will publish the results in full in the near future.

Confirmation of the decline comes after a number of operators also reported a year-on-year dip in Q3 revenue due to ongoing struggles in the Swedish market.

Betsson saw its overall revenue for the quarter slip 10.6% to SEK1.28bn, due in part to a 28.7% drop in Nordic revenue to SEK476.7m, with the operator citing struggles in Sweden.

NetEnt group chief executive Therese Hillman also said a poor performance in Sweden was one of the major reasons for the business posting lower revenue in the third quarter. Group revenue amounted to SEK437.4m, down 1.3% year-on-year.

Elsewhere, Unibet operator Kindred Group saw gross winnings revenue for the third quarter decline 2% year-on-year to £226.0m, while after-tax profit almost halved as struggles in Sweden hurt its bottom line. Chief executive Henrik Tjärnström said the difficulties of Swedish re-regulation continued to hurt revenue and make it difficult to attract players.

The country's former gambling monopolies, the early winners of the regulated market, have not been immune. Svenska Spel’s third-quarter gross gaming revenue also declined to SEK4.6bn as the effects of competition and regulation in the re-regulated Swedish market hit the company’s balance sheets. Net gaming revenue slipped 5.2% to SEK2.01bn, with chief executive Patrik Hofbauer saying the presence of new competition in the licensed Swedish market hit the operator.

Sweden’s former horse racing monopoly Aktiebolaget Trav och Galopp (ATG) bucked the trend to report a 12.6% increase in net gaming revenue for the third quarter to SEK1.17bn, setting a new company record. This was largely due to retail growth, however, with online revenue down 13.4% to SEK343m.

Spelinspektionen has faced criticism from licensed operators over its supposed lack of clarity regarding new regulations that came into effect in January of this year. The regulator has maintained that this is primarily due to operators being unaccustomed to the still-new market.

The regulator has handed out a series of regulatory penalties and warnings over apparent breaches of its rules, including a number in Q3. These included a host of penalties and warnings to operators for allowing wagering on sporting events featuring a majority of participants under the age of 18.

Cherry's ComeOn Sweden subsidiary and Snabbare brand were both fined, while Hajper, another ComeOn brand, and Legolas.bet were also handed penalties.

The affected operators argued that Spelinspektionen had not been clear about how it planned to enforce the prohibition on U18 betting. This prompted Gaming Innovation Group to temporarily suspend sports betting via its proprietary Rizk and Guts brands, saying this lack of clarity had put it in “an impossible position”.

Swedish operator association Branschföreningen för Onlinespel (BOS) also hit out at the rulings and requested a meeting with the regulator to discuss its concerns.

Spelinspektionen later cleared bet365, Betsson, ATG and the Kindred Group subsidiary Spooniker of any wrongdoing over the matter.

Image: Esquilo