Betsson announced on Friday that Latin America has emerged as its largest market in the second quarter, contributing 36% to the operator's €310.2 million revenue during the period. Regional revenue grew 32% year-on-year, reaching €112 million. CEO Pontus Lindwall remarked that there has been "strong underlying activity across sports and casino," significantly driven by record revenues from Argentina, Peru, and Colombia.
Lindwall indicated to iGB that targeting Latin America as a primary market had been a goal for the company. "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 expressed confidence in the region's potential, commenting, "We see more structural growth to come from LatAm than from, let’s say, Western Europe." In contrast, the Nordics experienced a 17% decline in revenue, attributed to reduced marketing expenses in Sweden and Denmark. Lindwall explained the challenges there, 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."
Looking ahead, Betsson plans to maintain its focus on mergers and acquisitions to strengthen its market presence and enhance in-house technology. During the Q2 earnings call, Lindwall revealed a new €75 million credit facility aimed at financing working capital and future acquisitions. "Our strategy is to grow both organically and through M&A. This gives us some extra room for M&A," he stated. He noted that past acquisitions have complemented existing business ventures and expanded into new markets.
Regarding future targets, Lindwall sees significant opportunities in Latin America, particularly in countries where Betsson currently lacks a presence.
Despite the overall strong revenue figures in the quarter, bolstered by increased activity during the first half of the World Cup tournament, a decline in B2B revenue negatively impacted profitability. Lindwall attributed this slump to decreased activity from one of its larger customers. The B2C sector reported an increase of 31.9% in active customers, totaling 1,825,487. However, combined customer deposits for B2C and B2B dropped by 7% year-on-year to €1.38 billion. Gross profit fell 8% year-on-year to €177.5 million, with a gross profit margin of 57.2%. Meanwhile, regulated revenues increased by 17%, making up 75.5% of total group revenue.
Lindwall emphasized the technical and product advancements made to support operations during the World Cup, including enhancing site capacity to manage up to five times the usual traffic. He expressed satisfaction with the sportsbook's performance, noting, "We made a lot of UX enhancements and made it easy for customers to find things to bet on."
Additionally, he discussed ongoing investments in AI technologies to refine Betsson's operational capabilities. "I believe it’s still early stage, 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.
