Betsson H1 results disrupted by tough regulatory dynamics

Nordic market adjustments and Dutch declines have seen Betsson AB governance report a 5% year-on-year revenue decline for Q2 2019 trading.

Publishing its H1 2019 interim update, Stockholm-listed Betsson AB reports a tough Q2 April-to-June trading period, in which group revenues declined 5% to SEK 1.27 billion (Q2 2018: SEK 1.3bn).

Betsson governance details a ‘period of operational adjustments’, in which the company has had to accommodate for new regulatory enforcements across the markets of Sweden, Norway and the Netherlands.

In its home market of Sweden, Betsson has seen one of its licences revoked by regulator Spelinspektionen, while the group has seen further Nordic woes as Norwegian regulator Lottstift implements strict ‘payment blocking orders’ on ‘unlicensed’ gambling operators.

As reported during Q1 2019 trading, Betsson governance has undertaken significant adjustments related to its Dutch market activities, seeking to meet KSA provisional regulatory requirements in order to obtain its future Netherlands regulated online gambling license.

These tough regulatory dynamics see Betsson report all-around corporate declines across its topline metrics, as the Stockholm online gambling group declares a period EBITDA of SEK 287 million (Q2 2018: SEK 379m), leading to a period operating income decline of SEK 196 million (Q2 2018: SEK 300m).

Year-to-date, Betsson maintains a stable revenue performance at SEK 2.6 billion (YTD2018: SEK 2.5bn), however group-wide adjustments see its YTD operating EBIT reduced to SEK 452 million, representing a 12% decline on 2018’s SEK 512 million.

Updating investors, Betsson AB Chief Executive Pontus Lindwall underlined confidence in the group’s long-term operating strategy to overcome its current individual market challenges.

“Betsson’s long-term strategy and focus is clear and is not affected by temporary downturns in individual markets,” he said. “We have a good financial position and a high degree of proprietary technology, which make us strongly positioned in the industry.

“I am confident in my view of Betsson’s capacity and in our strategic opportunities to pursue long-term profitable business with growth and good margins in regulated markets. We also have a geographical spread that compensates for temporary downturns in individual markets.”