Online gambling operator Global Gaming’s highly publicized struggles in Sweden’s regulated market led the company to a loss of over $12.4m in 2019.
Figures released Thursday by the Stockholm-listed Global Gaming 555 AB show the company’s revenue in the final three months of 2019 fell by more than three-quarters year-on-year to SEK57.5m. Operating profit swung from SEK18m in Q4 2018 to a loss of SEK26.6m while the company booked an after-tax loss of SEK31.6m after a SEK16.1m profit one year earlier.
For 2019 as a whole, revenue fell 55% to SEK412m and operating profit came in at -SEK118.7m, resulting in a net loss of SEK122m versus an after-tax profit of SEK125m in 2018. Not surprisingly, Global Gaming’s board didn’t recommend issuing shareholders any dividends.
Despite the negative numbers, CEO Tobias Fagerlund’s message to shareholders was upbeat, saying the future currently looked brighter than it had for a while. Fagerlund said Global Gaming’s goal is to “at least break-even” in the first half of 2020 and then to “deliver continuously increasing black numbers,” a potentially Freudian slip given that black is also the color of death.
Most of Global Gaming’s woes can be traced back to Sweden’s revocation of the local gambling license held by the company’s flagship Ninja Casino brand due to anti-money laundering and social responsibility shortcomings. Global Gaming’s efforts to appeal this revocation have so far gone nowhere, as have efforts to relaunch the Ninja brand in Sweden through a partnership with rival Finnplay’s Viral Interactive subsidiary.
Global Gaming’s Swedish struggles have now claimed the company’s relationship with sports betting technology supplier Kambi. Fagerlund said Global Gaming still hopes to launch its sportsbook ahead of this summer’s Euro 2020 football tournament, but given that Sweden was “the main market for the cooperation” with Kambi, “our agreement with Kambi has been concluded.”
Fagerlund says Global Gaming’s operations in Estonia and Finland took a 5% hit in Q4 due to a platform migration, but these markets “are profitable and continue to be strong.” Fagerlund says the company will look to grow operations in these two markets “despite increased competition.”
Global Gaming hasn’t given up on Ninja, and will allow the brand to “try its wings in a number of new locations,” although those locations went unspecified. Global Gaming also wants to have “at least one new brand operating in new and existing environments.”
Fagerlund acknowledged that, regardless of the significant adjustments Global Gaming has made, “there is much that can go against us,” but the plan was to achieve “something quite different from the year we have now left behind.” Investors weren’t entirely buying that the best was yet to come, as the company’s share price fell 3.3% on Thursday.
