Sweden’s Svenska Spel reported a fall in revenues to SEK2,001m or five per cent in its third quarter due to more competition and increased regulation.
Patrik Hofbauer, President and Chief executive of Svenska Spel, said: “It is positive that our customer bases and our digital business continue to grow. But even though we have stabilised 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.”
The net operating margin of 32 per cent was considerably lower than the previous year due to the new gaming tax. With adjustment for game tax, it amounted to 50 per cent.
The Sport & Casino business area was down two per cent compared to the same quarter last year. The business area Tur also decreased by two per cent, while Casino Cosmopol & Vegas decreases by just over 16 per cent. The results for Casino Cosmopol & Vegas were affected by customers’ move from physical play to online, but also by efforts linked to the duty of care and money laundering legislation.
Mr. Hofbauer explained: “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.”
Svenska Spel’s digital business increased by nine per cent compared to the same quarter of last year, of which sales in mobile phone increased by just over 13 per cent. The digital business accounts for 37 per cent of the Group’s net gaming revenue during the quarter.
In sports betting, the operator has expanded its range with SBTech the chosen supplier of a new sports book, which is expected to be in place in 2020. Online has also seen more live tables added and the new game Football Studio 1X2. 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.
During the quarter, Casino Cosmopol & Vegas, the company’s slot machine business, 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.
The quarter also saw Svenska Spel launch Verisec’s Freja eID technology to improve its customer identification processes on its Svenska Spel Tur and at Svenska Spel Sport & Casino platforms.
“Most companies that digitise their services put considerable resources on good user experience and to eliminate eventual friction for users who want to access the digital service,” Verisec’s chief executive Johan Henrikson said. “Thus, not keeping users locked to a specific sign-in solution is an important step. We believe that this is not only positive for the users, we also believe it is a strong competitive factor in that Svenska Spel is the first gaming company with a gaming license that offers its users more than one e-ID.”