Five things we learned from Betsson’s Q1 results

Despite regulatory headwinds in Europe prompting a 5% slip in casino revenue, Betsson’s Q1 2022 figures gave cause for optimism for the Stockholm-listed operator. It’s sportsbook offering produced “all-time high” revenue, up 45%, while the company’s expansion into new territories was highlighted as a major factor in the posting of year-on-year (YoY) revenue of €170.2m, up from €157.4m in the comparative period in 2021. EGR looks into five things we learned from the Malta-based operator’s Q1 figures. European headwinds European challenges have hampered a number of firms, and this has been reflected across countless Q4 2021 and Q1 2022 results announcements. Revenue in Europe plunged 44% YoY. Speaking to EGR, Betsson AB CEO Pontus Lindwall said: “We are in a challenging environment here [in Europe] and I don’t see any immediate change to that, unfortunately.” While “geographic diversification” and strong sportsbook growth boosted revenue for Betsson in the first three months, there is no hiding from the fact that regulation has hit hard. “Let’s now hope that Netherlands authorities can act in a professional manner, and in the application, so that it becomes an open market, which is what has been done in other European markets,” he added. The legal market in the Netherlands opened on 1 October 2021 and Betsson was prevented from applying for a licence due to the controversial 35-month “cooling-off” period that was implemented by the KSA on 1 July 2019 against operators for illegally targeting Dutch players. Following this, however, Betsson’s Netherlands licence application is well underway and Lindwall is hoping that a resolution will come in Q2. Sportsbook hook Posting figures of €56.4m, Betsson’s sportsbook vertical achieved “all-time high” revenue, representing a year-on-year increase of 45%. Lindwall stated that sportsbook trends were pleasing: “In this first quarter, we had a very strong development in the sportsbook, very strong outcome. “Margin was a little bit higher than the rolling average [of 8.3%]. But the main thing is the strong performance of the sportsbook and we’ve been trying to advance that vertical for a very long time. “The margins will always fluctuate between quarters, there will be highs, there will be lows, but the fact that our proprietary sportsbook is going so well in many different markets with different development stages and different kinds of sports interests. I’m very happy about that.” Lindwall was pleased with how the sportsbook rollout was progressing in North America, having launched in Colorado with Betsafe and that it was showcasing the product on offer for the North American market. “It really showcases the B2B proposition that we have in the US. We can prove that we have a good product and I’m looking forward to more happenings in [North America] during the rest of the year.” Latam lure The firm announced its Argentina launch in the capital, Buenos Aires, in February of this year and Lindwall was confident that Betsson will prosper in the Latam market. “This was the first quarter that we announced the figures for Latam as a separate region,” he told EGR. Revenue from Latam was €36.8m, an increase of 174% YoY. “We opened up in the first quarter in Argentina. We have activities going on in other markets. We are looking forward to the regulation that is happening in Brazil, in potentially the second half of this year. “We have great hope for this huge market.” Roll the dice on casino Casino revenue was down 5%, which Lindwall stated was primarily due to Dutch regulation (Betsson is sitting on the naughty step) as well as re-regulation in Germany resulting in restrictions on slots products and no table games. He reflected on the fact that last year the Netherlands market, which was a very casino-orientated market, had dragged down figures for that particular vertical. However, he was bullish when asked whether the downward trend in casino revenue was something to be worried about. “We compared to the first quarter last year where we had the Netherlands, which was a very big casino market for us, and now we don’t have it, so as a result casino is down compared to Q1 [2021], “ he said. The firm is working to develop its offering in other markets, however. “It’s heading in the right direction. So there is no need to worry at all for any downward trends as such.” The operator released 543 casino games during the period. Marketing gains Betsson’s marketing strategy, it was revealed, differs from region to region. Lindwall told EGR that it looks at marketing and sponsorship spend on a country-by-country basis. “When we enter a new market, like we are now predicting in Greece, we tend to spend a little more there in relation to revenues compared to what we do in more established markets,” Lindwall said. This was showcased during Betsson’s investor call on Thursday morning. In Sweden, where the brand is fully established, spend has been kept to a minimum, with partnerships signed with former Sweden football player Pontus Wernbloom and the country’s first nationwide amateur padel tournament In Grece, Betsson has splashed out on a deal with major sports outlet Nova Sports. In Italy, where the company posted all-time high quarterly figures, through StarCasino.sport, sponsorships have been signed with AC Milan, Intenazionale and SSC Napoli.