LeoVegas Profits Fell on Sweden's Cap for Online Casino Deposits

Online gambling provider LeoVegas says Sweden has to take "fast and decisive action" to remove illegal sites or risk a spike in gambling crime with problems.

Figures published this Thursday show that in the three months ended September 30, the Stockholm-listed LeoVegas generated revenue of €88.9m, up by just 1% from the same period last year. Earnings dropped by 6.3% to €11.9 million and after-tax earnings slid by almost one-fifth to €4.1 million.

Although the number of new depositing clients raising 24% year-on-year and returning depositing clients up 28%, the slight sales increase came. The gains is attributed to the company's launch of its Finnish brands GoGoCasino and LiveCasino, as well as the pandemic constraints placed on terrestrial gaming options.

Total deposits, however, only rose 6% year-on-year and average deposit per depositing customer shrank 16%, partially due to the online casino deposit restrictions imposed by Sweden in July. LeoVegas said that these reforms have resulted in "unhindered" development of foreign online operators who do not hold a Swedish license and are not subject to the same restrictions.

LeoVegas further argued that many of these foreign rapscallions were deliberately pursuing clients who signed up for Sweden's self-exclusion registry gambling epidemic. LeoVegas said this question “is big and is shaking the foundation of the entire Swedish license system”. If the country's lawmakers and regulators don't intervene immediately, LeoVegas cautioned that the result will be the end of a well-functioning market for gaming.

LeoVegas is more positive about Germany's transition to a compliant online gaming industry, while there will be some negative 'initial effect of the latest legislation that the company has "already begun implementing". With about 17% of LeoVegas G3 sales coming from Germany, the company can't afford to inconvenience local authorities.

The percentage of Nordic markets in Q3 sales dropped to 35% of the total by one-fifth year-on-year. Segment rest of Europe rose double-digit to 47%, while segment rest of the world added more than one-fifth to 18%.

Despite the German constraints, LeoVegas said sales came about 27% higher year-on-year in the current quarter due to the inclusion of bingo as a new product segment and the relaunch of the Royal Panda brand on LeoVegas' patented software platform in Finland.