Betsson announced on Friday that Latin America has emerged as its largest market in the second quarter of the year, contributing 36% of the operator's total revenue of €310.2 million. In this period, revenue from the region surged by 32% year-on-year, reaching €112 million. Betsson's CEO, Pontus Lindwall, remarked that the market demonstrated "strong underlying activity across sports and casino," highlighting record revenues generated in Argentina, Peru, and Colombia.
Lindwall shared with iGB that the transition to making LatAm the company’s largest market has long been a goal. He stated, "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. We see more structural growth to come from LatAm than from, let’s say, Western Europe."
During the same quarter, the Nordics experienced a revenue decline of 17%, attributed to a reduction in marketing expenditures in Sweden and Denmark. Lindwall elaborated that the landscape in these markets is competitive, with high customer acquisition costs and stringent regulations. He noted, "It’s a problematic situation in many European countries with the unlicensed operators that we compete with. When we compare the effectiveness of our money, we prefer to invest in other markets than the Nordics."
In terms of future strategy, Lindwall revealed plans to maintain a focus on mergers and acquisitions (M&A) aimed at expanding into new markets and enhancing in-house technology. He announced a new €75 million credit facility to support future working capital and M&A efforts, stating, "Our strategy is to grow both organically and [through] M&A. This gives us some extra room for M&A. If you look historically, we have done acquisitions which complement some business that we [already] have. And we have acquired full-stack businesses in markets where we don’t have a presence. I think that serves our strategy."
When asked about potential markets for expansion, Lindwall expressed optimism about the opportunities in Latin American countries where Betsson currently lacks a presence.
Q2 performance metrics showed impressive growth in revenue, buoyed by the World Cup, though profitability took a hit from a decline in B2B revenue attributed to decreased activity from a significant client. Active customers in Betsson's B2C segment rose by 31.9% in the quarter, totaling 1,825,487, yet overall customer deposits dipped by 7% compared to Q2 of the previous year, standing at €1.38 billion. The company reported an 8% year-on-year decrease in gross profit, amounting to €177.5 million and reflecting a gross profit margin of 57.2%. Notably, regulated revenues increased by 17%, making up 75.5% of total group revenue.
Lindwall also highlighted various technical upgrades made in preparation for the World Cup, allowing Betsson's platforms to handle up to five times the usual traffic. He expressed satisfaction with the performance of the sportsbook from a technical standpoint and outlined improvements in user experience. He mentioned early investments in AI tools aimed at boosting Betsson's operational capabilities, stating, "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."
