The Swedish gambling monopoly has seen a significant drop in profits after cutting bonuses and promotions.
Svenska Spel’s excuse for instituting a gambling monopoly in Sweden is the need to protect customers from gambling addiction, but the European Commission had very good reason to question its motives, as the only company licensed to operate under Swedish gambling laws was promoting its services more often than expected.
Since Svenka Spel toned its marketing campaigns down, the company’s profits dropped. With less bonuses and promotions, consumers are not that interested in betting, or in the company’s online gambling sites in Sweden.
Net revenues dropped by SEK 186 million, from SEK 2.48 billion to SEK 2.29 billion. Operating profits have also gone down SEK 83 million.
Is keeping the monopoly worth it?
With the European Commission monitoring its activity closely, Svenska Spel can’t afford to make any wrong moves. According to the company’s management, implementing a range of expensive responsible gambling initiatives and reducing marketing campaigns have largely contributed to the drop in profits.
Through its gambling and horse racing monopolies – Svenska Spel and Trav och Galopp – Sweden offers casinos online and offline. These two state-run operators are the only ones offering online and mobile betting for locals, but lawmakers have discussed liberalizing the online market.
Industry experts believe the country will eventually welcome foreign investors, and this could bring the state some extra income in taxes.