Swedish state–owned betting, gaming and lottery operator Svenska Spel has revealed that its total operating profit declined during H1 2022, despite overall revenue increasing by 1%.
In an interim update released today, the group shared that revenue had declined to SEK 3,898m (€369.5m) from SEK 3,938m (€373.1m), whilst on a quarterly basis revenue also rose by 1% from SEK 1,963m (€3.03m) to SEK 1,938m (€3.02m).
This was largely attributed by the group to closure of casinos during the second quarter of 2022, and despite this marginal increase in revenue from January to June 2022, operating profit declined by 4% from SEK 1,171m (€111m) to SEK 1,127m (€106.8m) with a margin of 29%.
Operating profit during the second quarter, meanwhile, fell by 7% on the previous year from SEK 574m (€54.4m) to SEK 531m (€50.3m), with an operating margin of 27%.
Svenska Spel asserted that this was due to higher costs across its operations, including investment in product development and technology, although the group did praise an increase in the number of ‘healthy revenues and healthy customers’ during the quarter.
“We see a positive development in the share of healthy income as a result of our strengthened gaming responsibility measures,” said Patrik Hofbauer, President and CEO of Svenska Spel.
“We continue to provide our customers with entertaining gaming experiences in a responsible way, as we want gaming to be a joy for everyone.”
A breakdown of product verticals saw further decline for the firm’s Sport and Casino business, with revenue falling by 19% during the second quarter, due to ‘strong comparative figures’ with the UEFA 2020 Euros taking place last year.
Additionally, Svenksa Spel also underscored that investment in strengthened responsible gamlbing measures had a ‘negative effect on revenues’ during the quarter, despite the positive impact on ‘sound revenues and customers’.
A notable development for the division, however, was the signing of a three-year agreement with Svensk Travsport to provide ‘good conditions for developing a complete offer of Swedish trotting to customers’.
On the other hand, the Casino Cosmopol and Vegas brand enjoyed more success during the quarter, recording a revenue increase of 95% – although again, Svenksa Spel pointed out that this was largely due to the closure of all three Casino Cosmopols during the pandemic.
Lastly, trading for the Tur business remained steady, with net gaming revenue standing at the same level as Q2 2021, whilst the group highlighted the success of the launch of two draws per week for the Eurojackpot product, which reached its ‘highest record’ for online gaming.
Moving forward, the operator noted that growth has been fuelled by commercial online betting and gaming – which grew by 7% – as well as the aforementioned reopening of land-based casinos.
However, the firm also noted some difficulties on the horizon, notably due to ‘uncertainties in the rest of the world’ across multiple financial markets, which are expected to have a negative impact on consumption.
“Higher prices are expected in the coming years,” Hofbauer continued. “It will hit consumption, which is expected to decrease, and we will see re-prioritization in the economy among consumers.
“How it will affect the gaming market and consumers’ entertainment wallets in the short and long term is currently uncertain. Despite this, growth is estimated at three percent in the total gaming market in Sweden for 2022 and two percent for 2023. Going forward, the trend will continue with online games, fast games and casino games.”
Lastly, the operator also remained hopeful of positive impacts from legislative changes in Sweden, with the government having submitted its bill for stricter gaming regulations to the parliament in May.
Expected to come into force on 1 July 2023, the Bill contains provisions for consumer protection and a long-term sustainable gaming market, as well as measures against match-fixing and illegal unlicensed betting.
“These proposals are something we at Svenska Spel view positively and are in line with our work for a healthy and sustainable gaming market,” Hofbauer remarked.