Svenska Spel digital revenue rises but market share falls due to limited offering

svenska-spel-gambling-revenueSweden’s state-owned betting monopoly Svenska Spel says it returned to growth last year thanks to a surge in gambling activity during the final quarter.

Svenska Spel’s net gaming revenue was largely flat (+0.2%) at SEK 8.96b (US $1.05b) in 2015 but net income posted a slightly larger gain (+0.9%) to SEK 4.8b as margins improved 0.4 points to 22.2%, above the target the company set for the year.

The numbers were boosted by a stronger performance in Q4, which saw revenue rise 1.6% to SEK 2.43b. However, SEK 45m in development costs resulted in Q4 margins falling nearly one full point to 21.3%.

Digital revenue improved 11% to SEK 1.7b last year thanks to a 59% rise in mobile and tablet revenue. However, the company says it lost mobile market share to other Swedish-facing operators, and cited this decline as further justification for its call to expand its limited digital offering via the addition of a casino product.

Svenska Spel’s share of the overall Swedish gambling market fell two points to 42% in 2015, while its share of Sweden’s online market was also down two points to 20%. The company launched a new unified digital offering in December, meaning its full palette of sports betting and keno products are now available across both web and mobile channels.

Svenska Spel’s product mix was largely unchanged from 2014, with games of chance notching the lion’s share at 54%, followed by casinos (29%) and sports betting (18%). Casino revenue was down just over 2% to SEK 2.4b while sports betting improved 3% to SEK 1.63b.

Sweden is currently preparing new gambling legislation that is expected to include a call to privatize the gambling monopoly. Sweden’s Ministry of Finance has said it hopes to release a draft of its legislative proposals by March 2017 and to submit a final version to the legislature by December 2017. The goal is to have the new regime in place before the September 2018 general election.