Betsson Q3
The top line
- Revenue was up 3% to SEK1.73bn while EBITDA was flat at €418.5m.
- Casino decreased 2% to SEK1.28bn but sportsbook rose 24% to SEK435.7m helped by sportsbook margin which increased 900 bps to 7.9%.
- Average daily revenues in Q4 were down 17.6% YoY (12.9% constant currency) with sportsbook margins at an “extraordinary low” of 4.4%.
Scandi Succession: What to make of Betsson’s u-turn over the future of CEO Pontus Lindwall? The sense of boardroom confusion certainly does the company no favors. The evident difference of opinion has already seen previous chairman Patrick Svensk depart in saying he had disappointed the company’s “major owners”. More bizarre, a #bringbackpontus campaign launched by an igaming events company crowed on social media yesterday about Lindwall getting “overwhelming support” from the industry.
Reverse ferret: New chairman Johan Lundberg says now is not the time to change leadership due to “future priorities” such as mitigation of the “unexpected Dutch decision” and the US entry. It’s an open question as to how much the “Dutch decision” – i.e. a regulatory process that was five years (and the rest) in the making – can be unexpected.
Going back: What is true is that complying with the demands from the Dutch regulator to halt operations will cost the company ~SEK300m in EBIT a year. The company claims a licensing decision will come in the summer of 2022 but when asked about future profitability, Lindwall said the company would “work towards profitability but not from day one”.
Hostages to fortune: On what was a fractious call with the analysts, Lindwall defended the company’s performance in western Europe and the Nordic region as well as its situation in Turkey where it acts as the B2B provider to Realm Entertainment.
When asked whether he expected Norway to deteriorate any further – payment issues were blamed for the Q3 decline in that country – Lindwall said “I have no such expectations”. Meanwhile, when asked about the potential for involvement in Turkey to cause issues with regard to the US, he said “that is not a good question…it is not true that it (Turkey) is illegal.”
No-loss leader: Where Betsson did see growth was in central and eastern Europe and the rest of the world. Breaking down its South American Q3 revenues, it saw 75% YoY growth to SEK 249m. On the US, Lindwall said the launch in Colorado in Q122 was designed as a showcase for Betsson’s B2B offering. “We don’t plan a huge launch campaign,” he added.
