Betsson Achieves Record Profit in Q2
Largely due to increased activity in Latin America and the popularity of sports betting, particularly in soccer tournaments, Swedish gaming operator Betsson has reported its highest profits ever during the second quarter of 2021. To be exact, this record-breaking sum is SEK 383.4 million.
Betsson has recorded its highest ever profits, due to growth in LATAM and sports betting. ©Frank Busch/Unsplash
Sports betting brings in the big bucks
Betsson AB’s President and CEO Pontus Lindwall credited sports betting for the company’s recent success. According to him, this industry not only adds revenue to Betsson’s additional online casino activities, but it also sees relatively high profit margins. In a July 22 report, Lindwall explained:
“The second quarter is proof of the strength of our business model. We have achieved an all time high profit based on our scalability and geographic spread, we have strong growth in Latin America, and we have strengthened our B2B-offering through the agreements that have been entered with Strive Platform Limited and Masterpiece Gaming.”
A closer look at the numbers
While operating sums or EBIT (earnings before interest and taxes) are in the range of SEK 383.4 million ($44.3 m), Betsson’s revenue for Q2 2021 was SEK 1.735 to 1.755 million. Out of the total revenue, most came from casino ventures, which added up to around 1.22 million. This was a 5% decrease from the same quarter in 2020. Meanwhile, sportsbook revenue saw impressive growth of 125%, while the profit margin was 8.5%.
The company’s operating income increased by 76.1% from Q2 2020, which brought them to an all time high EBIT. The company’s highest-earning quarter previously was Q4 2020, followed by a slight slump in Q1 2021. The company also reported that its active customer base increased by 25% in that time period, now with more than one million customers.
Costs were also high, of course. Betsson paid a reported SEK 578.6 million from what it brought it, including licensing costs, betting duties, commissions to partners and affiliate groups, and other costs. Added to these were further marketing costs, personnel costs, tax, investments, and external expenses. Still, the company’s gross profit grew by 24% in the last year.
The report also shed interesting light on which regions are experiencing the most growth and bringing in the most income. The Nordics are Betsson’s top earners, which makes sense given where the company began. This cluster of countries saw profits increase by 13.5%. Central and eastern Europe are next, along with central Asia. These areas combined total 38.0% year-on-year growth.
Western Europe follows, having brought in SEK 402.9 million. The report also notes that this region is most dependent on casinos, which may help us understand why it is behind other zones since many casinos have suffered financially in the last year of lockdowns.
The importance of sportsbooks, LATAM and soccer tournaments
Despite these being the highest earners, other regions show the fastest growth for Betsson. Lindwall pointed to Latin America in particular, which has seen huge expansion in Q2 2021. The regions outside of Europe and central Asia are also where sportsbook revenue was significantly more than online casino revenue. Lindwall explained:
“Betsson is now the market leader in Peru and in Brazil a marketing campaign has gone viral by a sponsorship of the ‘world’s worst’ football team. Betsson was also the official regional sponsor of CONMEBOL Copa América, which contributed to strong growth in new active customers in the region during the quarter.”
Betsson’s eager investment in the Latin American region and sponsorship of specific teams as well as the Copa América tournament have clearly paid off. Lindwall specifically noted soccer tournaments and sports betting are great areas of growth, not only in Q2 but in the year to come. He explained:
“During large international sporting events such as the CONMEBOL Copa América in football and the Euro 2020 the group have offered entertaining, competitive, and secure products. The ability to take advantage of these big sporting events is connected to the constant development of functions in the sportsbook to improve customer experience. We have also increased the exposure of Betsson’s brand, especially in selected countries in Latin America, which has attracted new customers in the region. The successes connected to both CONMEBOL Copa América and the Euro 2020 also paving the way for next year’s World Cup in football.”
