LeoVegas boss: Time to profit from customer influx
Group CEO Gustaf Hagman tells EGR firm is looking to profit from new depositing customers after making 2.5m loss
LeoVegas has reiterated its long-term plan for growth after posting a 2.5m loss in Q2 as the operator looks to profit from an influx of new customers during the quarter.
The operator posted a 67% year-on-year revenue increase for Q2 2016 yesterday, but reported a loss in profits due to marketing and affiliate costs related to its sportsbook launch.
The number of new depositing customers doubled from the previous quarter with 109,718 joining, driven by the increased marketing and LeoVegas Sport launch during the European Championships.
And speaking to EGR, LeoVegas Group CEO and co-founder Gustaf Hagman (pictured left) said the company has “great momentum” right now.
“As we said previously in Q1, the following quarter was going to open the floodgates to a lot of new customers, which we have done and now in Q3 it’s time to profit on those customers,” he said.
Marketing spend increased by 50% from the previous quarter to 18.7m (£16m), while marketing to revenue ratio was 60% – a figure Hagman says will fall during the next quarter.
“The ratio of marketing to revenue will come down,” he said.
“When really good opportunities arise, we want to be able to strike very much as we did in the second quarter. Having said that, the second quarter was an exception with our launches, so it’s going to come down.”
Hagman added that he was pleased sportsbook accounted for 4.6% of NGR during EURO 2016 and was optimistic for growth with a busy sporting season ahead.
“We’re taking the sportsbook very seriously and the reason for that is because it’s twice the market of the online casino market,” Hagman said.
“We think no one has taken the mobile position in live sports betting and that’s what we’re aiming for,” he added.