Betsson announced on Friday that Latin America has emerged as the company’s most significant market, contributing 36% to its revenue of €310.2 million for the second quarter of the year. This marks a substantial growth, with regional revenues rising by 32% year-over-year to €112 million. CEO Pontus Lindwall noted that the upsurge was propelled by exceptional performances in Argentina, Peru, and Colombia.
Lindwall had previously indicated that it had been a goal for the company to see Latin America evolve into its largest market.
"We didn’t say from day one that this will be our biggest region in the future, but we tend to invest in markets where we see good traction and good possibilities for profitability, and LatAm is one such market," he told iGB. He also remarked that the region shows more promise for structural growth compared to Western Europe. Latin America’s revenue totaled €64.2 million, making up 21% of Betsson’s total group earnings for the quarter, a rise of 8.3% year-over-year.
Conversely, revenues in the Nordics fell by 17% as the operator scaled back marketing efforts in Sweden and Denmark. Lindwall attributed this decline to increased competition, higher customer acquisition costs, and stringent regulations. "It’s a problematic situation in many European countries with the unlicensed operators that we compete with," Lindwall explained. "When we compare the effectiveness of our money, we prefer to invest in other markets than the Nordics," he added.
Betsson's strategy involves continuing its focus on new markets and enhancing its in-house technology through mergers and acquisitions (M&A). During the Q2 earnings call, Lindwall revealed a new €75 million credit facility aimed at financing working capital and prospective acquisitions.
"Our strategy is to grow both organically and through M&A. This gives us some extra room for M&A. Historically, we have made acquisitions that complement our existing operations, as well as acquiring businesses in new markets where we currently have no presence. This aligns with our overall strategy," he stated.
When asked about future targets for Betsson, Lindwall highlighted that he sees greater potential and opportunities in Latin America, particularly in countries where Betsson has yet to establish a presence.
In terms of performance metrics for Q2, despite the strong revenue numbers, a decline in B2B revenue affected overall profitability. Lindwall noted that this downturn was caused by reduced activity from one of Betsson's larger clientele. The number of active customers within the B2C segment rose by 31.9% to reach 1,825,487, although customer deposits across B2C and B2B decreased by 7% from the same quarter last year to €1.38 billion. Gross profits were down 8% year-over-year, totaling €177.5 million and reflecting a gross profit margin of 57.2%.
Additionally, regulated revenues saw an increase of 17%, representing 75.5% of Betsson’s total revenue.
Lindwall also shared that the company had implemented a range of technical and product enhancements to support its operations during the World Cup, including updated infrastructure to accommodate significantly higher traffic volumes. He expressed satisfaction with the technical performance of the sportsbook.
"We made a lot of UX enhancements to simplify the betting process for our customers," he stated. Furthermore, he mentioned Betsson's initial investments in AI capabilities aimed at enhancing operational efficiency, noting that AI is already being utilized broadly across the company's framework. "I believe it’s early stage still, but we use AI basically across the board in the operations of the company. So it’s broadly used but I think there is way more to come," he concluded.
