Betsson sales dropped for the first time ever

Betsson sales dropped for the first time ever

Betsson CEO Pontus Lindwall: "The gaming industry is facing changes."

Swedish listed gambling giant Betsson has had a dramatic quarter, with a 5 percent drop in sales compared to the second quarter of 2018. This is evident from the recently published quarterly figures.

Never before has the company recorded less revenue than in the same quarter the year before.

A number of key figures, with amounts converted into euros:

  • The turnover (or the gross game result) decreased by 5% to € 121.8 million.
  • The turnover of casino games even fell by 10%.
  • The total deposits amounted to € 444.3 million.
  • The number of active players decreased by 5% to 658,957.
  • Net profit collapsed by 37% to € 16.4 million.

One small bright spot: the turnover in sports betting increased by 14 percent compared to a year ago, while that was also a very good quarter due to the World Cup.

"The decline in the Netherlands"

The Betsson quarterly report cites the two main reasons for the poor result as "the challenging Swedish market and the decline in the Netherlands".

In Sweden, online gambling was legalized early this year, so Betsson suddenly had to deal with all kinds of strict rules and had to pay gambling tax on Swedish sales.

In June, Betsson subsidiary Nordicbet also received a € 1.8 million fine from the Swedish regulator because the gambling site had violated local rules for bonuses.

Stopped with iDeal

The decline was at least as strong in the Netherlands. Betsson was forced to rename the Dutch casino brands Kroon Casino and Oranje Casino into Casino Winner and Loyal Casino.

These two online casinos have also stopped using iDeal as a payment method, since the Gaming Authority sees iDeal as a strong indication that a casino is aimed at Dutch players.

Thanks to these measures, Betsson's turnover in the Netherlands has shrunk considerably. The company does not disclose separate figures per country, but in the entire Western Europe region, to which the Netherlands belongs, sales fell by 12 percent.

In other Western European countries, nothing special is going on, so that shrinkage must be almost entirely due to the Dutch market.

Permit in the second half of 2021

The CEO of Betsson, Pontus Lindwall, also discusses the future of Betsson in the Netherlands in the quarterly report. Mr. Casino quotes:

"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 stabilized 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. "

According to the draft policy rule published by the Gaming Authority last Friday, a gambling provider may not have focused specifically on Dutch consumers in the two years prior to applying for a license.

Since the rebranding van Kroon and Oranje took place in April this year, Betsson could not apply for a permit until April 2021. This means that the company could only start on the Dutch market in the second half of 2021. Betsson then has a considerable number of months behind 'tidier' ​​competitors who can already get a license at the beginning of 2021.

Investors dump Betsson share

Pontus Lindwall tries to keep the courage in his commentary on the figures with a generic talk about Betsson's long-term strategy:

"Betsson's long-term strategy and focus is clear and not affected by temporary downturns in individual markets. We have a good financial position and a high degree of proprietary technology, which makes us strongly positioned in the industry."

But investors don't care much and dump the Betsson share en masse. At the opening of the stock exchange, the share was immediately about 8 percent lower than yesterday's closing price, at 52.60 Zweede Kroon.

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