Svenska Spel has seen its online operations on the Swedish market continue to grow as the company points to increased competition as the primary driver of negative sales during the third quarter of the year.
During the time, net gaming revenue came to SEK2.01bn (£ 162.2 m), a 5% decline from SEK2.12bn (£ 171.2 m) in 2018, with a significantly lower operating margin of 32% due to the new gaming tax.
The digital performance of the company continues to grow with a recorded rise of nine percent, with mobile usage growing 13 percent, but this has seen the Casino Cosmopol segments of Svenska Spel and Vegas VLT decline of 16 percent.
Coming as a directly as a result of switching from physical play to online consumers, it was also pointed out that the sharp drop was related to the duty of care and money laundering legislation.
Casino Cosmopol recently saw the Linköping Administrative Court overturn last year’s decision by the country’s regulator to enforce a SEK 8 m ($880,000) fine, which was subsequently reduced to SEK 3 m (£ 241,798) for what the Spelinspektionen considered infringements in their efforts to combat money laundering.
In addition, both the business areas of Casino Cosmopol and Vegas continued making inroads during the quarter to replace old machines with updated versions that put a strong focus on consumer protection.
At about 3,100 of 4,400 computers being replaced, the company also emphasised that it “is being rebuilt to become one of Europe’s best and most modern”.
Patrik Hofbauer, president and CEO of Svenska Spel said:
“It is positive that our customer bases and our digital business continue to grow. But even though we have stabilised Svenska Spel’s operations after the changes at year-end, the result is not yet at the level we are striving for.
“We have an aggressive focus going forward, for example through investments that contribute to enhanced customer experience and data-driven customer communication, but with continued concern for our customers.”
Adding: “We can see that the gaming industry is being squeezed by lower revenues in 2019. Part of the explanation lies in the changes brought about by the new game regulation, in particular the national suspension register game break and deposit limits.
“These are positive changes as they protect consumers and build a long-term sustainable industry through sound revenue.”