Betsson announced on Friday that Latin America has overtaken other regions as its biggest market in the second quarter of the year, contributing 36% to the company's total revenue of €310.2 million. The region's revenue surged 32% year-on-year, reaching €112 million, with CEO Pontus Lindwall highlighting robust growth across both sports and casino segments, particularly in Argentina, Peru, and Colombia.
Lindwall pointed out that the transition to making Latin America the leading market had been a strategic goal for some time. "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 stated. He noted that the revenue from this area amounted to €64.2 million, which accounted for 21% of the overall group revenue, reflecting an 8.3% year-on-year increase.
In contrast, revenue from the Nordics fell by 17% as Betsson reduced its marketing efforts in Sweden and Denmark. Lindwall candidly noted challenges in those markets, stating, "The markets are quite competitive, it’s expensive to acquire new customers, and the regulations are quite tight. 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."
During the Q2 earnings call, Lindwall revealed a new €75 million credit facility intended for working capital and future mergers and acquisitions (M&A). He emphasized the company’s dual strategy of pursuing both organic growth and acquisitions. Historically, he explained, Betsson has focused on acquiring businesses that either complement existing operations or establish their presence in new markets. He remarked on the significant opportunities still available in Latin America, pinpointing markets where Betsson has yet to enter.
Despite healthy revenue figures, strong overall performance during the World Cup was offset by a decline in B2B revenue due to diminished activity from one of Betsson's larger clients. The company reported a 31.9% increase in active B2C customers, totaling 1,825,487, albeit with customer deposits across both B2C and B2B dropping 7% year-on-year to €1.38 billion. Gross profit fell 8% compared to the previous year, amounting to €177.5 million, which translates to a gross profit margin of 57.2%. Meanwhile, regulated revenues grew by 17%, making up 75.5% of total group revenue.
Lindwall also shared insights into technological advancements made to bolster Betsson's operations during the World Cup, including enhancements that allowed the platform to accommodate up to five times its usual traffic. He expressed satisfaction with the technical performance of the sportsbook, highlighting improvements made to enhance user experience.
"We made a lot of UX enhancements and made it easy for customers to find things to bet on," Lindwall added. He also mentioned the company's early-stage investments in AI technology to strengthen operational capabilities. "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.
