Despite a disappointing end to 2019, the future looks bright for Betsson after the online casino and sportsbook reached a share purchase agreement with the Gaming Innovation Group (GiG). After a busy start to the year, we take a look at what’s next for the Malta-based operator in 2020.
Betsson Group revenues declined by 10% in Q4 of 2019
Betsson reported a 10 per cent year-on-year fall in revenues for quarter 4 of 2019, implying the weak development in Dutch, Swedish and Norwegian markets was one of the reasons behind the decline.
Group revenues in Q4 were £103m, with the sportsbook down 9 per cent to £24.8m and the online casino down 10 per cent to £77m. Company operating income also slumped to £16m, a drop of 41 per cent, while Betsson’s EBIT margin fell to 15.5 per cent.
Pontus Lindwall, CEO of Betsson, said: “Up until now, one year after the Swedish reregulation, we have still not seen the market consolidation that we expect due to the great number of operators, many of them showing no profitability.”
Dutch high court rules against Betsson subsidiary appeal.
As well as a decline in revenue, Betsson lost its high court appeal in January. The Netherlands judge ruled in favour of the Dutch Gambling Authority (KSA) in a historic case between a Betsson affiliate subsidiary and the regulator.
The case originates from an injunction and financial penalty threat that KSA filed against Content Publishing Limited in 2015. The Malta-based firm published online gambling text with links to operator sites which the KSA deemed to constitute illegal advertising. After Betsson’s initial appeal in January 2019 was dismissed, they decided to take the case to the Dutch Council of State.
The online casino claimed that the decision to issue penalties and an injunction were disproportionate and unlawful, arguing the promotional text used did not constitute advertising and concerned ‘editorial information’. However, the court determined the text was “designed to forward potential players to providers of online casino games,” ruling in favour of KSA.
Betsson is undeterred despite recent challenges
Despite their recent challenges, Betsson has pressed on with its GiG share purchase agreement. Under the terms of the deal, GiG will sell its assets to the online casino for €31m, and the sale includes the Kaboo, Rizk, Thrills and Guts brands.
However, the acquired B2C brands will remain on the GiG platform for at least 30 months, with Betsson paying a premium platform fee for the first two years, which will be based on the net gaming revenues generated. Pontus Lindwall commented that the deal is an excellent opportunity for Betsson, and allows them to apply their core marketing insights and B2C skills to scale the assets to their true potential.