The Swedish state-owned gaming company, Svenska Spel, has released its financial report for 2020. The report shows a decrease in both income and profits despite a rise in digital activity. However, this increase was not enough to compensate for the losses incurred from the closure of its land-based operations.
Svenska Spel’s income and profits decreased despite digital expansion.
In the year ending December 31, 2020, the company’s net gaming income was SEK 76.7 billion (£667.1 million/€761.6 million/$923.8 million), a 9% decrease from the previous year (excluding SEK 163 million in non-recurring income, all of which was earned in the final quarter).
The company stated that the closure of its Casino Cosmopol land-based casino chain due to the coronavirus (COVID-19) pandemic resulted in a SEK 777 million reduction in net gaming income.
Excluding its land-based casino operations, which generated SEK 886 million, the operator’s net gaming income increased by 1% to SEK 67.8 billion, the company reported.
The Tur lottery division was responsible for the majority of revenue, increasing by 2.0% to SEK 48.4 billion, while the Sport and Casino digital brands generated SEK 19.5 billion, down 8.0%.
The operator stated that its digital business is experiencing strong growth, accounting for 46% of revenue in 2020, up from 35% in 2019. Despite temporary measures implemented by online casinos, including a SEK 5,000 deposit limit, Svenska Spel stated “this will put pressure on income and reduce income growth.” The Tur lottery business also set new online sales records in the final quarter.
The Swedish gaming organization’s operational earnings declined by 3% to SEK 2.4 billion in 2020 when compared to 2019. The operator stated that the closure of physical operations resulted in a SEK 441 million reduction in operating earnings. The full-year net earnings were SEK 1.87 billion, down 31% from 2019.
Fourth-quarter revenue was SEK 2.13 billion, down 14% year-over-year.
The closure of physical casinos resulted in a SEK 250 million decrease in net revenue in the fourth quarter, leading to a SEK 121 million decrease in operating earnings.
However, excluding casino operations, fourth-quarter net gaming revenue rose by 3%. The quarter’s net earnings were SEK 547 million, down 18% from the fourth quarter of 2019.
“Even though our physical casinos have been closed for three quarters, the group’s profitability remains strong and has improved the operating profit margin for the full year 2020 and the quarter,” said Patrick Hofbauer, President and CEO of Svenska Spel (pictured). “As in the previous quarter, our sports and casino and Tur business areas are seeing revenue growth. This indicates that despite the impact of the COVID-19 pandemic, such as temporary gambling responsibility measures and reduced store sales, two of the three business areas have seen growth, demonstrating their strength and stability.”
In August 2020, the operator’s board of directors decided to permanently shut down its casino operations in Sundsvall due to declining profits and customer traffic. The company stated that the decision resulted in SEK 81 million in non-recurring costs.
The Swedish administration initiated a dialogue in November regarding extending temporary regulations for internet gambling sites. This includes the debatable weekly deposit cap of 5,000 Swedish kronor, which is planned to remain in effect until June 2021.
The government stated they aim to provide enhanced protection for players during the COVID-19 outbreak.
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