The Earnings of the Casinos II. - Betsson

Published on 15/01/2018

Each gambling operator has a different strategy. The strategy from Betsson Group is to cover as much of the internet as possible. And how do they do that? Simple. All you need to do is just to operate over 15 different brands. In their portfolio you can find the well known brands like betsson, betsafe or casinoeuro, but also the brands focusing the local markets like Suomiarvat, Norgesautomaten, Nordicbet, Sverigeautomaten, Betsafe.dk and much much more.

As a comparison to a different strategy we can look at bwin. While Betsson is spreading the strategy with many brands, Bwin is much trying to push manily one domain.

Betsson Group also referred as Betsson AB is a company originating from Sweden which offers many online gambling products ranging from poker, bingo, casino, scratch tickets to sports betting. This company which was founded in 1963 has dramatically changed its business model over the recent years. Betsson was known for its online gambling, but now it is more of a company which invests in gaming companies and administers them. Some of the prominent companies in the portfolio include Betsson itself, NordicBet, Betsafe etc.

Betsson AB which has a NASDAQ Stockholm listing was actually founded by Bill Lindwall & Rolf Lundström in 1963. It was known as AB Restaurang Rouletter then, and used to supply slot machines to the Swedish restaurants. The company was later renamed to Cherryföretagen AB (Cherry) in 1972. However, a government resolution was passed in the year 1978 where all the slot machines were banned and this led to reorganization of the business. Cherry started acquiring commercial gaming companies and that’s how the basis for the new corporation was created. In the period from 1986 to 1991, Cherry started casinos and slot machines in several European countries. In 1998, a minority stake was bought by Cherry in Net Entertainment which was an online gaming solution developer which was later acquired completely in 2000.Cherry buys into Betsson in the year 2003 and Betsson was founded by Anders Holmgren, Henrik Bergquist and Fredrik Sidfalk. This gave Cherry the access to England. In 2006, Cherry changed its name to Betsson and that’s the history of the brand.

Betsson as a company has 9 millions registered customers, which is an increase of 17 percent over the previous year. It has almost 500 thousand active customers which is a 35 percent increase over the previous year. According to Betsson, the revenues increased by almost 7 percent to SEK 1.12 billion (US $ 125.6 mn) while the operating income increased by 52 percent to SEK 235 mn. The margins this year increased by 7 points to 23.7 percent. The reason the Betsson group enjoyed such high earnings was because of the core casino operations, where the numbers rose almost by 1/5th to SEK 823.7 mn. The revenue generated through mobile casinos went up to 83 percent and the overall revenue generated through mobile rose by 46 percent to SEK 546.8 mn. This now forms almost 49 percent of the group’s revenue.

The reason why the casinos gave such a strong performance was because it hosted around 1758 games. And in fact, 1246 games were available on the mobile platform. The blip in the revenues for Betsson was because of sportsbook revenues. They dropped by almost 15 percent to SEK 264.4 mn and this was due to player friendly results, decreased contribution from the B2B partner and pulling out from certain markets.

Its core Nordic ops grew by 17.1 percent in the 4th quarter. The Western Europe region gained almost 5.2 percent whereas Betsson lost almost 8.2 percent in the Eastern Europe, Central Europe and Central Asian casino game market. Overall the group revenue increased by 11 percent to SEK 4.12 bn and the 14% rise in the core casino revenue was the major contributor. The operating margins slipped by almost 0.8 points, to 23 percent and the second quarter was the reason for this! However, the operating income still rose by 9 percent to SEK 946.4 mn.

This year, Betsson expects a great boost to their revenue thanks to its Italian and UK operations and its acquisition of Netplay TV. Besides, some other markets like turkey showed a strong growth in the first quarter which fuelled this belief that the latest year is going to be great for the company.

If you liked this article please look also at the Earnings of William Hill.

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