Date: 24.04.2024

by Kajetan Sawicz

Last update: 08.05.2024 12:18

Svenska Spel Faces Challenges as Casino Closures Impact Profits

The first quarter of 2024 has proven challenging for Svenska Spel, a prominent Swedish gambling operator, following the strategic closure of its Casino Cosmopol locations in Malmö and Gothenburg.

Economic Adjustments and Financial Performance

Despite a modest 1% drop in gaming revenue, Svenska Spel’s overall business stability remains intact, buoyed by strong earnings from its Tur division. However, the company’s net gaming revenue has dipped to SEK 1,956 million—a slight decrease from the previous year.

The operating profit took a more substantial hit, plummeting by 49% to SEK 310 million. This decline is attributed to SEK 375 million in non-recurring costs associated with casino closures, restructuring, and a significant fine by the Swedish Gambling Authority.

Online Ventures and Business Area Performance

In contrast to the faltering casino sector, Svenska Spel’s online business witnessed a 6% increase, now accounting for 56% of total revenue. However, the Sports & Casino segment saw a 3% reduction in net gaming revenue, primarily due to underperforming pool games.

Conversely, the Luck business area, which includes popular games like Eurojackpot and Triss, experienced a record 6% growth, fueled by seasonal gift purchases and strategic sales initiatives.

Strategic Overhaul and Future Plans

Svenska Spel is not just navigating through immediate financial turbulence but is also undertaking significant organizational changes. “We have reorganized, reduced the number of staff, and from April 1, we have a new organization in place,” stated Erik Strand, President and CEO of Svenska Spel. These measures are part of a broader strategy to reallocate resources towards transformation, promoting responsible gaming, and ensuring sustainable growth amidst a slowing market and economic downturn.

The Casino Cosmopol & Vegas segment continues to struggle, with a 32% drop in net gaming revenue, mainly due to the aforementioned casino closures and reduced operating hours in Stockholm. This sector alone has negatively impacted the group’s operating profits by SEK -238 million, marking a significant downturn from the previous year.

Community Engagement and Contributions

Despite financial setbacks, Svenska Spel remains actively involved in the community, distributing 71 million prizes valued at SEK 395 million during the quarter.

Additionally, the company continues to support sports through sponsorships and events, including a significant contribution of SEK 500,000 to sports associations during the 27th Tips-SM championship.

 

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