Svenska Spel has seen its digital operations continue to make headway in the Swedish market, as the firm points to increased competition as the primary driver for negative revenue during the third quarter of the year.
Net gaming revenue during the period came to SEK 2.01bn (£162.2m), a five per cent reduction from 2018’s SEK 2.12bn (£171.2m), with a considerably lower operating margin of 32 per cent due to the new gaming tax.
The firm’s online performance continues to grow with a nine per cent increase reported, with mobile usage rising 13 per cent, this has however saw Svenska Spel’s Casino Cosmopol and Vegas VLT segments decline 16 per cent.
Coming as a direct result of customers’ move from physical play to online, it was also stressed that the sharp drop is linked to the duty of care and money laundering legislation.
Casino Cosmopol recently saw the Administrative Court in Linköping reverse a decision made by the country’s regulator last year which saw a SEK 8m ($880,000) penalty issued, this was subsequently reduced to SEK 3m (£241,798) for what the Spelinspektionen called violations in its efforts to combat money laundering.
Furthermore, during the quarter both the Casino Cosmopol and Vegas business areas continued to make inroads in replacing old machines with updated versions that place a strong emphasis on consumer protection.
With approximately 3,100 of 4,400 machines having been replaced, the firm also stressed that it Gothenburg-based property “is being rebuilt to become one of Europe’s best and most modern”.
“It is positive that our customer bases and our digital business continue to grow,” commented Patrik Hofbauer, president and CEO of Svenska Spel. “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.”
Adding: “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.”