Swedish Gaming Company CEO Anticipates More Expansion as First-Quarter Net Profit Jumps 73.1%
Swedes' gaming money dropped to SEK1.88 billion ($194 million) in Q1, a measly bump compared to last year's SEK1.96 billion. Svenska Spel's CEO, Johnson, isn't crying over spilled chips, though; she's optimistic about the company's future.
Why the dip in revenue, you ask? Two land-based casinos shuttered their doors in January 2024, leaving a single location standing tall. But the party might be over for this remaining casino too – Sweden's government has voted to nix land-based casinos nationwide. Svenska Spel, the country's gambling monopoly, seems cool with this decision, saying land-based venues will vanish by 2026.
Johnson ain't sweating the single-casino situation. To her, it means she can double down on other profitable ventures. "We've been grappling with challenges in the Casino Cosmopol business area for a good while now," she explained. "Closing two casinos last year cut our Q1 earnings. Closing the remaining location means we can pour our focus into other lucrative operations."
But wait, there's Easter to think about. Seems like folks spend a pretty penny on lotteries over this holiday, and last year, Easter fell earlier in the year, giving Svenska Spel a boost. This year's late Easter took a bite out of the Tur lottery segment's revenue, which still managed to bring in a respectable SEK1.22 billion.
Casino Cosmopol in Stockholm raked in SEK26 million in revenue, a far cry from Q1 last year's SEK82 million (when two other locations were still operating). Svenska Spel's Vegas gaming machines also felt a pinch, with revenue plummeting 25.7% to SEK75 million, all due to players opting for responsible gambling.
The good news is, Svenska Spel's online gaming hot streak hasn't faltered; it collected SEK1.18 billion in revenue, a 6.9% increase over last year. Mobile gaming continues to rule the roost, with 53% of all online earnings credited to it. However, agents saw their earnings slip by 11.6%, and revenues from restaurants and bingo halls dropped 25.7%. Casino Cosmopol brought up the rear, generating the rest of the Q1 earnings.
Despite the revenue dip, the company's profits are up, up, and away! Operating profit almost doubled to SEK609 million thanks to savings in personnel costs from the casino closures. After taxes and other expenses, Svenska Spel's net profit increased by a whopping 73.1% to SEK509 million.
"We've reorganized and made moves last year, giving us a financial cushion for investments," declared Johnson. "These investments will fuel our growth, support sustainable gaming, and help secure a long-term, profitable future for Svenska Spel."
So, is this the end of Casino Cosmopol? While it's a bummer for employees and regulars, Svenska Spel sees this change as an opportunity to strengthen its digital gaming offerings and weather the storm of land-based casino closures.
Sources: [1], [2], [3], [4]
- Despite the closure of two land-based casinos in Sweden, Svenska Spel's CEO, Johnson, remains optimistic about the company's future.
- Due to the government's decision to eliminate land-based casinos in Sweden, land-based venues belonging to Svenska Spel will vanish by 2026.
- In 2024, Easter's late timing adversely affected the Tur lottery segment's revenue, leading to a decrease in earnings.
- Svenska Spel's casino in Las Vegas experienced a lower revenue due to players preferring responsible gambling.
- Despite a revenue dip caused by the closure of Casinos Cosmopol, Svenska Spel's profits are increasing, with a 73.1% rise in net profit after taxes and other expenses.
