Sweden’s Svenska Spel Revenues Decline Due to Increases in Unregulated Gaming
Declining revenues continue for Swedish state-owned online gaming operator Svenska Spel, who blame competition from unregulated gaming as the main factor.
Svenska Spel recently reported 4.3 billion Swedish Krona ($504 million USD) in revenue for the first six months of 2015. This represents a 2.4 percent decline from the 4.5 billion Swedish Krona ($527 million USD) reported during the same period in 2014. While this might appear to be a relatively small decline, but it's significant given Svenska Spel is the only company licensed to offer online gaming in Sweden, where the gaming market itself is continuing to grow.
Svenska Spel CEO Lennart Käll does not believe that the Swedish government is doing enough to reduce if not eliminate unregulated gaming in the country.
"The result for the quarter increased slightly, but we still feel a strong concern about the market’s uncontrolled development," Käll said in a note to the media. "Although our net revenue, happily, is around the same level as last year, we lose market share as the market grows. The competition from unregulated gaming companies is intense. We call for swift and concrete measures from both politicians and authorities to ensure that the Swedish gaming market is healthy and safe."
Svenska Spel Press Officer Johan Tisell echoed those sentiments a few months ago in an exclusive interview with PokerNews.
"There seems to be no political initiative whatsoever to curb the growth in the unregulated market pending a proposed new licensing system, that will come into effect in 3-4 years from now," Tisell said in April. "Unregulated operators have invested heavily in marketing during the last few years – 2.6 billion SEK last year alone which amounted to just over 70 percent of the total gaming marketing spend in Sweden. Mind you, this marketing is unlawful according to Swedish legislation."
We call for swift and concrete measures from both politicians and authorities to ensure that the Swedish gaming market is healthy and safe.
The effects of the growing unregulated market on Svenska Spel are alarming to the company with claims that unlicensed foreign operators experienced growth by a huge 25 percent. At the same time, Swedish Spel's online market share decreased from 22.3 percent in 2014 to 21.6 percent in 2015.
Svenska Spel believes that the unregulated gaming companies have grown over the past few years due to a competitive advantage, since these companies do not need to follow strict regulation and place less emphasis on responsible gaming.
"Svenska Spel has lost market shares over the last 6-7 years, so there is an underlying trend as well," Tisell proclaimed. "The development is not specific for Svenska Spel but rather, with the odd exception, for the entire regulated market. This is the result of increasingly tougher competition, Svenska Spel not being able to meet the demand for new products (online casino), stricter regulation and restrictions for marketing etc. We have also, from a responsible gaming perspective, decided not to offer our products and recruit customers with the help of bonuses and free spins."