Bloom Off: Sweden Market Begins to StrugglePublished November 6, 2019 by Lee R
Operators struggling to understand regulation guidelines are feeling the impact on the ledger.
After a 3.4% online gambling revenue decline for Q3, Sweden has some work to do.
The Q3 figure reported from the Swedish Gaming Authority (Spelinspektionen) reflects an online gaming revenue total of SEK3.35bn (£268.6m/€310.9m/$344.4m), a sequential drop from Q2's SEK3.47bn.
The Q3 figure is also lower than Q1's SEK3.42bn in the first year of regulated online gambling in Sweden.
Operator Concerns and Struggles
Private operators reported a year-on-year dip in Q3 revenue in kind, acknowledging “ongoing struggles” in the Swedish market.
Betsson's overall Q3 revenue dropped 10.6% to SEK1.28bn, primarily driven by a 28.7% revenue drop in the Swedish market to SEK476.7m.
NetEnt group chief executive Therese Hillman attributed her organisation's overall 1.3% year-on-year revenue drop to SEK437.4m as “poor performance” in Sweden.
Unibet operator Kindred Group saw Q3 gross winnings decline 2% year-on-year to £226.0m, with overall profits after tax almost halved.
Chief executive Henrik Tjärnström called the “difficulties of Swedish re-regulation” to date barriers to revenue and player attraction.
Even early leaders and former gambling monopolies in the country were pinched: Svenska Spel’s Q3 gross gaming revenue declined to SEK4.6bn, citing shifts in competition and regulation--while Net gaming revenue dropped 5.2% to SEK2.01bn, with chief executive Patrik Hofbauer blaming new competition in the licensed Swedish market.
Former horse racing monopoly Aktiebolaget Trav Galopp (ATG) turned in a 12.6% increase in net gaming revenue and an organisational record total SEL1.17bn for Q3, but land-based performance drove the growth while online revenue dropped 13.4% to SEK343m.
Lack of clarity in the regulations appears to be operators' primary complaint.
Regulatory penalties and warnings centered around operators allowing under age 18 wagering on sporting events.
Penalties Handed Down
Cherry's ComeOn Sweden subsidiary and Snabbare brand were both fined, as well as ComeOn Brand Hajper and Legolas.bet; bet365, Betsson, ATG and the Kindred Group subsidiary Spooniker were cleared of penalties after review.
Gaming Innovation's Pullout
With Swedish operator association Branschföreningen för Onlinespel (BOS) requesting a meeting with the regulator to discuss concerns, look for more adaptions in regulation legislation in Sweden soon.