Betsson reported a record number of active customers and revenue for its third quarter, yet profits decreased significantly compared to the previous year. In an exclusive interview with iGB, CEO Pontus Lindwall discussed the challenges affecting profit margins and expressed optimism about the company's earnings trajectory.
During the third quarter of 2026, Betsson's group revenue soared to €326.5 million, marking a 10% increase from €295.8 million, aided by the consolidation of Rhino Entertainment Group from August. However, EBIT (earnings before interest and taxes) plummeted by 31% to €46.1 million, leading to a contraction of the margin from 22.6% to 14.1%. EBITDA also fell by 23%, down to €63.4 million. The company's net income experienced a notable decline, falling to €28.2 million from €50.1 million, which translates to earnings per share of €0.19 compared to €0.34 in the previous year. Operating cash flow decreased to €54.5 million from €64.8 million.
Lindwall emphasized the importance of sequential trends, pointing out that EBIT had risen by 9% compared to the second quarter, marking the second consecutive quarterly increase. He noted the margin had improved from 13.6%, stating, "Maybe the most important thing for an investor is that we increased EBIT sequentially. So it’s important that we are now growing EBIT again." However, he refrained from providing a timeline for a return to year-on-year profit growth, admitting, "It’s hard to tell when we will see profit growth compared with the same quarter last year. I don’t know that yet, but we are certainly moving in the right direction."
The gross profit dropped by €9 million to €181 million, with the gross margin reducing from 64% to 56%. Still, revenue from locally regulated markets surged by 35%, now accounting for 78% of total revenue, up from 64%. This shift in focus raised gaming taxes by approximately €28 million to a record level.
When asked whether the company, now majorly invested in Latin America, is becoming a lower-margin entity, Lindwall responded affirmatively, stating, "Yes. We are now growing a lot in Latin America, in a couple of regulated B2C markets. Those come with a different cost structure and, most importantly, a different tax structure."
Latin America emerged as the fastest-growing region, contributing 36% of revenue and expanding by 52%. Active customers climbed by 40% to nearly 1.9 million. Regarding the impact of the World Cup, Lindwall remarked, "It lifts volumes a bit, but even more so it lifts the number of active users, and that’s important. So I hope we can manage to keep some, or most, of those customers going forward."
In contrast, Western Europe saw a growth of 14% to reach its strongest quarter to date, driven by Italy, while the Rest of World segment more than doubled thanks to Rhino’s operations in Canada. However, Central & Eastern Europe and Central Asia experienced a decline of 17% attributed to lower B2B license income, and the Nordics reported a drop of 10%.
Casino revenue reached an all-time high, increasing by 14% and constituting 77% of total revenue. Sportsbook revenue was relatively stagnant, rising only 1% to €72 million, with the sportsbook margin slipping to 8.1% from 8.8%.
The B2B segment struggled, with revenue down 39% (or €30 million) due to decreased income from a significant client, while B2C revenue climbed by 28%. B2B now represents only 14% of overall revenue and showed a slight decline from the previous quarter.
Lindwall highlighted the need for improved B2B growth, expressing hope that the decline seen with their largest customer has stabilized, stating, "We don’t know what it will look like in the future, but we certainly hope it will continue to build up from here." He noted that technology acquired with Rhino would enhance their B2B operations moving forward.
On regulatory matters, Lindwall remarked that some proposed new taxes in Latin America indicate a misunderstanding of the industry, asserting that such approaches would be unmanageable. He criticized turnover-based taxes, saying, "Any kind of tax on turnover doesn’t really work for this industry."
Betsson has maintained a cautious investment strategy in Brazil, having been minimally impacted by the country’s near-ban on online gaming. Lindwall described the ban as "a shocking decision" and expressed his expectation that it would change, stating, "No country has managed to shut down internet gaming and get away with it."
As of the end of September, the company reported net cash of €98.3 million, a decrease from €220.0 million a year prior, following approximately €59 million spent on Rhino. Looking ahead, Lindwall indicated that Betsson is ready to make significant acquisitions, stating, "We could do a sizeable deal. And given the structure of our balance sheet, we wouldn’t be afraid to take on some more debt to do a bigger acquisition."
He also expressed keen interest in prediction markets, despite regulatory challenges that hinder their implementation in most of Betsson's operating markets. When asked about creating a regulated framework for prediction markets in Europe, he decisively said, "Yes, I would definitely press that button. In certain high-tax jurisdictions, we would then have another product with the same offering but lower tax. So that would be interesting."
For the start of Q4, average daily revenue up to October 18 showed an 11% increase over the Q4 2025 daily average, even with a sportsbook margin that remained below its eight-quarter average. For the nine months of 2026, revenue totaled €922.1 million, rising by 3%, while EBIT declined by 39% to €122.3 million.
