Betsson has reported record customer numbers and revenues in its third quarter, yet profits have seen a significant decrease compared to the previous year. In an interview with iGB, CEO Pontus Lindwall discussed the factors affecting profit margins and expressed optimism about the direction of earnings moving forward.
In Q3 2026, Group revenue reached €326.5 million, a 10% increase from €295.8 million, aided by the consolidation of Rhino Entertainment Group beginning in August. However, EBIT dropped by 31% to €46.1 million, with the margin contracting to 14.1% from 22.6%. EBITDA fell by 23% to €63.4 million, while net income decreased to €28.2 million, down from €50.1 million, translating to earnings per share of €0.19 compared to €0.34. Operating cash flow also decreased, falling to €54.5 million from €64.8 million.
Lindwall emphasized to investors the sequential improvements in the business, noting a 9% rise in EBIT from the previous quarter, marking the second consecutive quarterly increase. "Maybe the most important thing for an investor is that we increased EBIT sequentially," he stated. "It’s important that we are now growing EBIT again."
However, he refrained from committing to a timeline for a return to year-over-year profit growth, expressing uncertainty but confirming progress.
The lower profit margins are tied to a shift in business structure. Gross profit fell by €9 million to €181 million, with gross margin dropping to 56% from 64%. Notably, revenue from regulated markets soared by 35%, now comprising 78% of overall revenue, up from 64%, which increased gaming taxes by about €28 million to a new high.
Regarding the shift towards Latin America, a significant market for Betsson, Lindwall acknowledged the impact of a different cost and tax structure: "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."
In terms of performance, Latin America accounted for 36% of total revenue, experiencing a remarkable 52% growth and a jump in active customers by 40% to almost 1.9 million. Lindwall commented on the positive influence of the World Cup in increasing user activity: "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."
Western Europe also excelled, with a 14% increase attributed especially to Italy, while the Rest of World segment more than doubled thanks to Rhino’s Canadian operations. The Central & Eastern Europe and Central Asia markets declined by 17% due to lower income from B2B licenses, and the Nordics saw a 10% drop.
Casino revenue achieved a 14% increase to reach an all-time high, accounting for 77% of total revenue, while sportsbook revenue remained nearly flat, growing just 1% to €72 million as the sportsbook margin dipped to 8.1% from 8.8%.
In the B2B sector, revenue fell 39%, or €30 million, driven by diminished income from one client, while B2C revenue surged by 28%. B2B now makes up 14% of revenue and has slightly decreased from Q2 figures. Lindwall mentioned the stabilization of revenue from the largest customer and expressed hope for future recovery: "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 also pointed out concerns regarding proposed taxes in Latin America, which he believes could hinder business viability: "Any kind of tax on turnover doesn’t really work for this industry."
Despite challenges, Betsson maintained a cautious investment approach in Brazil, largely sidestepping the implications of a recent near-complete ban on online gaming in the country. Lindwall described the ban as "a shocking decision" and expressed confidence in future regulatory adjustments: "No country has managed to shut down internet gaming and get away with it."
Financially, the company’s net cash amounted to €98.3 million as of the end of September, down from €220.0 million a year prior; this drop was partly due to an investment of approximately €59 million in Rhino. Lindwall noted ongoing market observations, hinting at potential acquisitions: "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 interest in exploring prediction markets, despite current regulatory hurdles: "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."
Looking towards the future, Betsson observed a robust start to Q4. Average daily revenue up to October 18 was 11% higher than the daily average for Q4 of 2025, despite lower sportsbook margins. Year-to-date revenue reached €922.1 million, a 3% increase, although EBIT fell by 39% to €122.3 million.
