Svenska Spel Reports a Decrease in Annual Net Gaming Revenue
Author:
Muhammad Gregory
Renowned Swedish gambling operator Svenska Spel published its year-end revenue report, which indicated a small one percent decline in the net gaming revenue compared to last year. The Net Gaming Revenue (NGR) of Svenska Spel during the entire year of 2022 was SEK 8,036 million, as none of the gambling segments recorded any high spikes. Revenue from harmful gambling was quite low as the operator implemented player safety measures that also impacted the overall revenue.
The Swedish gambling operator Svenska Spiel reported minimal decline in their revenue report for 2022.
?Raphael Andres/Unsplash
While the NGR for 2022 recorded a one percent year-on-year decrease, the operating profit of the Swedish entity was down three percent, with operating margins amounting to 30 percent. The net operating profit of Svenska Spel in 2022 was SEK 2,387 million. A subpar performance in the fourth quarter contributed to the slight decrease in the annual net gaming revenue. The operator notched a revenue of SEK 2,185 million in its fourth quarter, two percent lower than the preceding quarter. Simultaneously, the operating profit, SEK 580 million, was also down by three percent in the fourth quarter, with an operating margin of 27 percent. Online gambling activity slightly increased, marking a 1 percent year-on-year increase, and was responsible for reeling in almost half of the operator’s quarterly revenue.
For several years, Svenska Spel was the exclusive and only legitimate online gambling provider in Sweden. This has helped the operator build a massive customer base. With an increased number of players, the operator’s responsibilities also increase in a regulated Swedish gambling market. Several player safety norms are to be followed, and measures are to be implemented in the active fight against harmful gambling. According to Svenska Spel, it has implemented these player safety measures to promote responsible gambling. However, that is leaving a negative impact on the net gaming revenue. The gambling operator has implemented these player safety measures across all segments that it offers, and it has had a positive effect when it comes to responsible gambling but a negative one when it comes to generating revenue.
The sports betting and casino segments also reported decreased activity in the fourth quarter of 2022, as the segments marked an 8 percent year-on-year decrease. The FIFA World Cup 2022 in Qatar was expected to boost the numbers in the segment of sports betting, but because of the nation’s absence from the grandest stage, quite a few bettors chose not to participate in the activity in the final quarter of last year. The time difference was also an aspect, as most of the initial matches kicked off during college and office hours in Sweden. These were the two key contributing aspects to subpar performance in the segment that was expected to recover in the fourth quarter. In addition to that, there were no other football leagues to bet on as they had all paused for the World Cup.
The lottery segment was one of the few gambling segments that was up in the fourth quarter, as it recorded a small year-on-year increase of 2 percent. The operator has credited this increase to the increase in the number of game offerings to its players. One of these games is the Eurojackpot which had a jackpot of SEK 1.3 billion in the fourth quarter. The NGR from slot machines significantly dropped as the segment was down ten percent. This was another segment that was also affected by the responsible gambling measures put in place by the operator. Harmful gambling revenues are at an all-time low for Svenska Spel, but it has negatively impacted the overall NGR of a few gambling segments. The deteriorating financial situation of players was also considered a contributing aspect.
The CEO and President of Svenska Spel, Patrik Hofbauer expressed his satisfaction after seeing the annual revenue report. Hofbauer also revealed how much the operator has contributed to the state treasury.
“I am happy that the board intends to propose a dividend of SEK 2 billion to the owner. And because our surplus goes back to the Swedish people is one of the reasons why we are all of Sweden’s gaming companies. During the 25 years that Svenska Spel has existed, together with our customers, we have contributed over SEK 100 billion to the state treasury.
2022 was a challenging year for Svenska Spel
Quite a few segments were down with respect to the NGR in the final quarter of 2022 for Svenska Spel, but this was not the first time it happened. Projections may have been higher, but they were not sky high as the entire year of 2022 was a challenging one for the Swedish operator that was, apparently, still suffering the after-effects of the Covid-19 pandemic. In an interim report that the operator published in May last year, Svenska Spel confirmed that the entity had gotten off to a shaky start. Apart from the pandemic after-effects, some regulatory developments in Sweden also impacted the operator’s revenue in the initial quarters of 2022.
The interim report, which was published, carried data about the operator’s earnings and the total revenue between January and March 2022, which was basically the first quarter. In the first quarter, the NGR recorded a three percent year-on-year decrease as the total revenue generated was SEK 63 million lesser than the revenue which was recorded in the corresponding quarter of 2021. In addition to that, to promote responsible gambling, betting limits were imposed at the start of 2022. That drove more gambling segments down into the red as the overall operating profit recorded a fall of 0.4%, indicating that profit margins did not suffer as badly as the gambling segments.
The operator’s fight against harmful gambling
In 2022, Svenska Spel has pointed out two primary factors responsible for the drop in revenues throughout the year. The first was the effects and repercussions of the pandemic and the other was the obligated implementation of player safety measures to promote and strengthen the cause of responsible gambling. In order to protect its players from harmful gambling, these measures were deployed since the start of 2022.
Game and deposit limitations prevented vulnerable players and others with a gambling problems from partaking in several gambling activities on Svenska Spel’s platform. Young audiences were categorized under vulnerable players, while deposit limits were for problematic gamblers who showed all traits of harmful gambling and were at the risk of losing all their money.
