Betsson reported a record third quarter for 2026, with a rise in active customers and revenue, yet profits took a notable hit compared to the previous year. In an exclusive interview with iGB, CEO Pontus Lindwall discussed the factors affecting margins and expressed optimism about the direction of earnings.
Group revenue reached €326.5 million for the third quarter, an increase of 10% from last year's €295.8 million, aided by the consolidation of Rhino Entertainment Group starting in August.
However, EBIT experienced a significant decline of 31%, falling to €46.1 million, which caused the margin to shrink from 22.6% to 14.1%. EBITDA also dropped 23%, totaling €63.4 million. The company's net income fell sharply to €28.2 million from €50.1 million, translating to earnings per share of €0.19 compared to €0.34. Operating cash flow slid to €54.5 million from €64.8 million.
Lindwall encouraged investors to look at the sequential growth, noting that EBIT rose by 9% compared to Q2, marking the second consecutive quarterly increase. The margin improved from 13.6% during the previous quarter. "Maybe the most important thing for an investor is that we increased EBIT sequentially," he stated. He declined to predict when the company might return to year-on-year profit growth, saying, "I don’t know that yet, but we are certainly moving in the right direction."
As gross profit fell by €9 million to €181 million, the gross margin decreased to 56% from 64%. Revenue from locally regulated markets surged by 35%, now accounting for 78% of total revenue, up from 64%. This increase in regulation resulted in a record €28 million jump in gaming taxes.
When asked if Betsson's focus on Latin America signals it is becoming a lower-margin company, Lindwall confirmed, "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 stood out with revenue growth of 52%, constituting 36% of overall earnings and bringing in nearly 1.9 million active customers — an increase of 40%. Regarding the influence of the World Cup, Lindwall mentioned, "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 Western Europe, revenue increased by 14%, primarily driven by Italy, while the Rest of World segment more than doubled thanks to Rhino’s Canadian operations. Conversely, Central & Eastern Europe along with Central Asia saw a 17% decline due to reduced B2B license income, while revenues in the Nordics declined by 10%.
Casino revenue rebounded 14% to an all-time high, contributing 77% of total revenue. Sportsbook revenue, however, experienced just a 1% increase to €72 million, with the sportsbook margin falling to 8.1% from 8.8%.
In the B2B segment, revenue dropped by 39%, or €30 million, largely due to decreased income from a single customer, although B2C revenue rose by 28%. B2B now represents only 14% of total revenue, showing a marginal decline from the previous quarter.
Lindwall expressed a hope for stronger B2B growth, noting that the decline from the largest customer has stabilized: "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 added that technology assets obtained from Rhino will support the B2B sector moving forward.
On regulatory challenges, Lindwall critiqued some proposed taxes in Latin America, saying, "They would make it impossible to run" because they indicate a lack of understanding of the industry. He further remarked that a tax on turnover is not viable for this sector.
Regarding Brazil, where the company maintained a minimal investment due to recent restrictions on online gaming, Lindwall described the decision as "shocking" but remains hopeful for future changes, stating, "No country has managed to shut down internet gaming and get away with it."
Concerning financial positioning, Betsson reported a net cash position of €98.3 million at the end of September, down from €220 million a year ago after allocating approximately €59 million towards Rhino. Lindwall indicated readiness for potential acquisitions, asserting the company would not hesitate to take on additional debt for a significant deal.
He also expressed interest in prediction markets, despite regulatory restrictions in many of Betsson’s operational jurisdictions. He responded affirmatively when asked if he would advocate for a regulated framework in Europe, stating, "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."
As for the early indicators of Q4, average daily revenue from the start of October up to the 18th was 11% higher than the daily average for Q4 2025, even with a sportsbook margin below the eight-quarter average. Year-to-date revenue stands at €922.1 million, a slight increase of 3%, while EBIT has decreased by 39% to €122.3 million.
