Sweden’s former gambling monopoly Svenska Spel suffered an overall revenue decline in Q4 2018 despite double-digit online gains.
Figures released Wednesday show the state-owned Svenska Spel generated revenue of just under SEK2.4b (US$260.5m) in the three months ending December 31, 2018, a 3.7% decline from Q4 2017. The company’s Q4 operating profit was similarly down 3.1% to SEK1.23b.
Svenska Spel’s mainstay lottery division was essentially flat at SEK1.32b but Sports & Casino division fell over 7% to SEK573m and the Casino Cosmopol & Vegas unit was down more than 10% to SEK491m.
The company’s online operations were the highlight of Q4, with overall online revenue shooting up 14% to SEK774m, pushing online’s share of overall revenue up five points to 32%. Mobile revenue grew even faster (26%) in Q4, pushing mobile’s share of overall revenue to 23%.
For 2018 as a whole, revenue hit SEK8.78b, a modest SEK160m decline from 2017’s annual result, while profits were down 4% to SEK4.5b. Again, online was the star performer, with FY18 revenue shooting up one-fifth while mobile revenue was up nearly two-fifths.
The company blamed its Q4 profit shortfall on SEK78m in costs associated with preparations for Sweden’s new liberalized online gambling market. These preparations included finally adding casino products to its online offering and improving the payout to customers of its Oddset sports betting product.
Svenska Spel was also required to split its operations into distinct online and land-based operations to assuage complaints by international operators who maintained that the monopoly had an unfair cross-selling advantage from its existing customer database.
Svenska Spel CEO Patrik Hofbauer, who assumed the reins last December, said the adaptation to Sweden’s new market was “a huge effort in a short time.” Hofbauer claimed that his company was introducing its “new gaming experiences” to Swedish gamblers “aggressively and thoughtfully.”
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Thoughtfully is the watchword, as the new liberalized online market is barely a month old and Sweden’s gambling regulator has already had to issue multiple warnings for operators to comply with the new mandatory self-exclusion policy.
Last week, Minister of Civil Affairs Ardalan Shekarabi suggested the country could follow the UK’s lead and impose a ban on all gambling advertising during live sports broadcasts. This week, Shekarabi summoned all 69 online gambling licensees to a meeting on February 14 to discuss their marketing activities.
Recent statistics show Svenska Spel was Sweden’s sixth-biggest advertising spender in 2018 and second among gambling companies (behind Unibet’s parent company Kindred Group).
