Operator News

Svenska Spel’s net profits fall following casino closures in first quarter

By Phil - 24 April 2024

Following the closures of Casino Cosmopol in Malmö and Gothenburg in order to reduce losses, Swedish operator Svenska Spel said its first quarter was marked by a period of adjustment as it looks to lay the foundation for continued successful operations. Gaming revenue was down one per cent with the underlying business remained stable with strong earnings from the Tur business area.

The Group’s net gaming revenue for the quarter came in at SEK 1,956m, a decrease of one per cent, which is mainly due to the restructuring of the Casino Cosmopol & Vegas business area. Operating profit of SEK 310m marked a decrease of 49 per cent with an operating margin of 16 per cent, negatively impacted by non-recurring costs of SEK 375m during the quarter. These include the closure of the casinos in Malmö and Gothenburg, restructuring costs linked to the review of the Group, and a provision for the administrative fine imposed by the Swedish Gambling Authority on Svenska Spel Sport & Casino.

Th group’s online business increased by six per cent compared to the same quarter last year, and accounted for 56 per cent of the group’s revenue during the quarter.

Net gaming revenue for the Sports & Casino business area decreased by three per cent during the quarter compared with the same quarter last year. This is mainly due to a poorer outcome for the pool games. The business area Luck increased net gaming revenue by six per cent compared with the corresponding quarter last year. This is the highest quarterly growth for the business area ever. The increase ws driven by Eurojackpot and continued growth for Triss. This is due to both efforts to increase sales of Triss, and the effect of Triss being popular as a gift at, for example, Valentine’s Day and Easter.

The operator said: “Svenska Spel has a stable business with strong brands, the gaming industry’s highest image and a high level of commitment among its employees. But also challenges in the world around us, such as slowing growth in the gaming market and recession in the Swedish economy. To meet this, the Group has been working since the autumn to future-proof Svenska Spel by reviewing the Group’s organisation, working methods and costs.

“We have reorganised, reduced the number of staff, and from April 1 we have a new organisation in place. In this way, we have freed up resources that we can invest in transformation, strengthened responsible gaming and growth. These are important investments for long-term sustainable value creation,” said Erik Strand, President and CEO of Svenska Spel.

Revenues and earnings for the Casino Cosmopol & Vegas business area continue to be negatively impacted by the major restructuring of Casino Cosmopol. Net gaming revenue decreased by 32 per cent compared to the same quarter last year. This is mainly due to the closure of the casinos in Malmö and Gothenburg, but also reduced opening hours at the remaining casino in Stockholm. The Group’s operating profit was affected by SEK -238m from the Casino Cosmopol & Vegas business area, which is a decrease in operating profit of SEK 183m compared with the same quarter last year.

During the quarter, Svenska Spel distributed 71m prizes in number games and lottery tickets with a total value of SEK 395m. The quarter’s highest win was more than SEK 173m on Eurojackpot, the eighth highest win ever at Svenska Spel and the highest Swedish Eurojackpot win since 2019. The sports games have delivered 18m wins during the quarter, of which 15 on Stryktipset.

Stryktipset has completed the 27th edition of the championship Tips-SM with approximately 53,000 people and 3,500 teams registered. The three best tipsters, individually and in teams, got to donate the prize money of a total of half a million SEK to sports associations through the sponsorship initiative Gräsroten.

Svenska Spel has approximately 5,100 agents across the country and is continuously investing in improving the customer experience in the stores and simplifying the situation for the agents. During the quarter, the delegates were honored at a Winners’ Gala when the year’s best agents in nine categories were appointed.

In sports sponsorship, Svenska Spel started the year as the main sponsor of the Sports Gala and has since carried out a large number of activations around the Swedish Ski Association and its eleven sports, the Swedish Championships week in Luleå and Boden, and ice hockey’s top leagues SDHL, SHL and HockeyAllsvenskan.

Business area Tur has had a strong quarter and increased net gaming revenue by six per cent driven by Eurojackpot and good sales of Triss.