The gambling landscape in Sweden has changed dramatically in the past couple of years. Svenska Spel, which once had a tight grip on the country’s gambling activity, lost its monopoly power and immediately began to see its revenue decline as competition increased. 2020 hasn’t brought good news, either, thanks to the COVID-19 pandemic. Svenska Spel shuttered its casino operations at the end of March, falling in line with casino operators across the globe, and hoped that things would bounce back. That appears not to be happening, though, as the company has made the decision to keep its Casino Cosmopol in Sundsvall – the first Cosmopol it ever opened – closed permanently.
The property hasn’t been profitable for more than ten years, so the decision most likely didn’t surprise many. However, the 68 employees of the casino are undoubtedly stressing about what they’ll do now, especially as the economy is still reeling from the coronavirus. The potentially good news for some is that they might be able to find a position at one of Svenska Spel’s other casinos, located in Gothenburg, Malmö and Stockholm. However, given the fact that Sundsvall and Stockholm, for example, are separated by about 234 miles by car, daily commutes are out of the question.
Since the start of the COVID-19 debacle, 800 Svenska Spel land-based casino employees have been furloughed, leaving only about 100 gainfully employed. Since there is still no set date for casinos to be able to reopen, operators are having to make some very tough calls, and the closure of Svenska Spel’s flagship property is one of them. Says company CEO Patrik Hofbauer, “With a constantly declining customer base, the casino in Sundsvall is no longer profitable and then it is unfortunately not commercially defensible to continue to run the business.”
Svenska Spel introduced its Sundsvall property to the world in 2001. It did well for a while, but changes in regulations, an expanding market and a pesky money-laundering issue have plagued the venue, and the company, in the past decade. The first quarter of this year wasn’t entirely devastating, as the company saw an increase of 11.4% in its operating profit, but the second quarter put everything back in the tank. Net gaming revenue for the quarter was $190 million, off 19% from the same period a year ago. That led to a loss in operating profit of $6.9 million.
Svenska Spel has its hand in online gambling now, which should help it offset the land-based casino losses at least a little. More Swedes are now gambling online, and the segment continues to gain traction. The return of major sports is helping, as well, since sports gambling finally has worthwhile targets. Complete, up-to-date figures aren’t yet available, but the online gambling market rose 3% from April to May, and additional improvements are forthcoming.
