The end of a long and ultimately successful road towards gambling market liberalisation in Sweden has put one of its own – Stockholm-listed LeoVegas AB – on target to break the 50 per cent barrier for revenues derived from regulated markets.
LeoVegas has told SBC Magazine that it expects to derive more than 50 per cent of its revenues from regulated markets across the world now that the new Swedish igaming sector is up and running.
Posting its financial figures for Q3 2018 back in November, the operator said that it had emerged from a challenging quarter for its two largest markets – the UK and Sweden – to post a year-on-year revenue increase of 41 per cent to €78.6m.
During this period, which of course predated new regulations in Sweden from 1 January 2019, the company also increased the portion of its net gaming revenue derived from regulated markets to 35.5 per cent, up from 25.3 per cent for the corresponding period of 2017.
Two months on, the group’s CEO and co-founder Gustaf Hagman said: “NGR from locally regulated markets accounted for 35.3 per cent of the total during the third quarter.
“Now that the Swedish market is regulated, we expect that more than 50 per cent of our revenue will be derived from regulated markets. The Swedish revenue was 24 per cent of the total in Q3 and we are optimistic that it will grow.”
Hagman had described the third quarter of last year as one of “transition” for LeoVegas, which saw a drop in average player value that it was not able to mitigate in the short term by 318,189 depositing customers – a new record for a quarter.
However, the company was, in fact, setting itself up for sustained success in Sweden by focusing on compliance measures and launching a new front-end platform, often at the expense of other growth initiatives.
This included work on more proactive measures to combat anti-money laundering and the implementation of extended source-of-income routines to deliver a more in-depth review of a customer’s financial situation.
“The regulatory needs in Sweden have changed since the market became regulated,” Hagman explained. “The work on meeting compliance requirements in the best way possible has been necessary and will give us a major competitive advantage. We are now at the forefront in this area, ensuring long-term sustainable and profitable growth for the group.”
In Sweden, LeoVegas will focus on new features for its casino, including the promotion of tailored products and localised brand ambassadors for the country, combined with the development of more exclusive games to maintain active players and encourage brand loyalty now that financial bonuses are only available to first-time players.
Hagman concluded: “LeoVegas is the number-one casino brand in Sweden, and so we will focus on product features and innovation within this main product. In all of the markets we are active in, localisation is very important for everything from the core product, right through to the marketing campaigns, ambassadors and customer service.”