Gambling giant Svenska game in crisis: Turnover collapses
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24 Jul 2024 •
Reading time: 2 minutes Swedish state gambling company Svenska Spel is facing headwinds. Turnover and profit in the first half of the year have fallen. Yet CEO Anna Johnson looks to the future with confidence. She emphasizes that recent measures lay the foundation for long-term growth.
Total gambling turnover fell by 2.9% to 3.82 billion Swedish crowns. According to Johnson, this is mainly due to tightened measures to combat problem gambling. This involves income checks for players with high stakes and more attention to player welfare. In addition, Svenska Spel has announced that it will from now on report on the share of turnover that comes from customers with a lower risk of gambling problems.
Cost savings and reorientation
Another factor that depressed turnover is the closure of two land-based casinos of the Casino Cosmopol chain in Gothenburg and Malmö. The Swedish government has even proposed stopping all activity. This is because the company would not be profitable enough.
Nevertheless, Johnson sees opportunities. Due to the closure of the casinos and a reorganization within the company, Svenska Spel has managed to reduce costs and improve the profit margin. This gives room for investments in other parts of the company and in responsible gambling practices. Although it is a stopgap measure.
Online growth as a bright spot
The Tur lottery segment is the only part showing growth. With a turnover increase of 4.6%. The other components, such as sports betting and online casinos, are struggling with declining turnover. Partly due to stricter measures against gambling addiction and stronger competition.
Despite the challenges, online gambling at Svenska Spel is growing. Internet sales increased by 6.7% to 2.19 billion Swedish crowns. Mobile gambling accounts for almost half of online turnover.
Costs are rising despite cuts
Although Svenska Spel has cut costs, overall expenses have increased. This is partly due to higher personnel costs and depreciation. Operating profit fell by 18.2% to 950 million Swedish crowns. After taxes, 794 million Swedish crowns remained, a decrease of 19.1%.
Optimism for the future
Despite the disappointing results in the first half of the year, CEO Anna Johnson remains optimistic. She emphasizes the importance of responsible gambling and the opportunities Svenska Spel has to grow in other segments. According to her, the cost savings and reorganization form a solid basis for the future.