No love at home for Svenska Spel as revenue drops in 2019

Svenska Spel Revenue

Former monopoly operator Svenska Spel took a hit on both its revenue and profits in 2019, following the launch of Sweden’s reformed gambling market.

CEO & President Patrik Hofbauer described the year as “tumultuous”. Yearly net revue dropped by 2.4% to SEK 8.58 billion (£682.1 million). Meanwhile, annual turnover was down by 7.2% – totalling SEK 19.50bn (c.£1.6 billion).

A challenging year 

Much of Svenska Spel’s challenges can be linked with adjusting to the re-regulated market’s 18% online tax rate. This was clear to see in its operating profit figures. These dropped by 45.7% year-on-year (YoY) for Q4 2019 and 39.9% for the year as a whole.

Net gaming revenue for 2019 was also down. This dropped by 2% to SEK 8.57bn. With that said, the figure for the final three months went up by 4% to SEK 2.39bn.

Hofbauer shared his thoughts on how Svenska Spel moves forward, looking in particular at responsible gambling. He thinks it’s important for both the operator to regain customer trust and the industry to strive towards a sustainable future.

“In 2020, I hope that together in the industry we can agree on a definition of problem gambling and sound revenue. This is necessary to create greater transparency and a more sustainable industry.”

“It is also an important prerequisite for being able to meet our long-term challenge, to strengthen Svenska Spel’s position as the company with the best reputation in the gaming market. We have the opportunity to regain consumer confidence, but we must do it together as an industry in order for us to succeed.”

Online on the rise 

Despite last year’s struggles, Svenska Spel can look to online and mobile for further opportunities. The digital side of things brought in 8% more in Q4 of last year, than in the previous quarter. Altogether, this aspect of operations now accounts for 34% of group revenue.

A transition year 

Recognising the lessons that 2019 brought, Hofbauer also thinks that Svenska Spel is better-equipped to thrive in the long-term. He also noted that the Swedish market in general had “a negative growth”, and the operator’s quarterly results were “in line with expectations”.

He continued with the below.

“The most important thing during the year has been to stabilise the business after the major transition to a new gaming market, which we have now done, which means that we are well-equipped for the future. We are entering the new year with an aggressive focus going forward, but with continued concern for our customers.”