Betsson Q3 revenue rises 3% after dust settles on boardroom drama

Betsson has reported a 3% year-on-year revenue rise for Q3 2021 to €173.4m.

Third-quarter casino revenue, which equates to 74% of the total, dropped 2% annually to €127.7m on a tough comparative period due to the Covid-19 pandemic, during which time there was a “surge in the demand for digital entertainment”, according to the Stockholm-listed operator.

Sportsbook revenue, meanwhile,  grew by 24% to €43.6m, driven by sportsbook margin of 7.9% amid favourable results during the latter stages of Euro 2020 and the Copa America.

Q3 EBITDA came in flat at €41.9m on an EBITDA margin of 24.1%, while operating income fell 2% to €32.4m.

Active customers for the period climbed by 7% annually to 986,429.

A key Q3 talking point for Betsson was the Netherlands, which has blocked Dutch consumers from accessing its products following the launch of the country’s regulated online gambling market on 1 October.

Betsson will now submit its Dutch licence application no later than at the end of Q1 2022 in connection with the conclusion of the operator’s cooling-off period.

The outcome of the application process is expected to be communicated after the summer of 2022, by which time the 10 initial firms licensed by the KSA will have gained a near 12-month advantage.

Betsson’s exit from what was formerly a key European market for the firm is expected to cost it approximately €2.5m per month from Q4 2021.

In fact, the Q4 forecast is looking fairly bleak in general. The average daily revenue after the Q3 reporting period, up to and including 17 October, was 17.6% lower than in Q4 of last year.

Adjusted for currency effects and acquisitions, the average daily revenue for that same period drops by 12.9% year-on-year, in part due to an extraordinarily low sportsbook margin of 4.2%.

On a market-by-market basis in Q3, revenue from the Nordics decreased by 3% to €54.5m, while Western Europe revenue plummeted 28% to €35.3m.

Revenue from Central & Eastern Europe and Central Asia (CEECA) hit €54.3m following an increase of 21%, while Rest of World revenue rocketed by 59% to €29.3m.

This performance was mainly driven by Chile and Peru, where deposits were at an all-time high.

Q3 played host to an explosive boardroom drama at Betsson, where CEO Pontus Lindwall was ousted by former chairman Patrick Svensk.

That outcome has since been reversed following Svensk’s resignation, who lost the trust and confidence of major shareholders over the handling of the decision to replace Lindwall.

Commenting on the Q3 results, Lindwall said: “An important guiding star for my leadership has always been to drive the company towards the goals set for it, regardless of obstacles along the way and I intend to continue according to that.

“We have built a very strong and competent team at Betsson and I look forward to continuing to build the company even stronger in the future,” he added.

Betsson’s share price slumped 5% in early trading on Nasdaq Stockholm.