Betsson CEO on a record Q2 and pushing ahead with Latam expansion

It was all smiles during Betsson’s Q2 earnings call, and for good reason. 

The operator posted record EBIT for the second consecutive quarter, with a figure of €64.1m (£54m).

Revenue for Q2 came to €271.5m, representing a 15% year-on-year (YoY) increase and Betsson’s 10th consecutive quarter of increased operating income.

The summer’s Euro 2024 and Copa América football tournaments bolstered sportsbook revenue up to an all-time high of €78.4m for the operator, pairing nicely with record casino revenue of €191.1m.

During the quarter, the company announced a massive sponsorship deal with Serie A champions Inter Milan, while it also made inroads in the Latam market by securing licences in Peru for its Betsson, Betsafe and Inkabet brands. 

Revenue for the Latam region came to €62.6m for the second quarter, up 21.8% and accounting for 23% of Betsson’s total revenue.

Here, Betsson CEO Pontus Lindwall speaks to EGR about the record-breaking quarter, capitalising on the summer’s football fever, the operator’s ambitions for Latam, and raising the industry’s reputation with stellar ESG practices.

EGR: The company cited Euro 2024 and Copa América as major factors for the Q2 results. Did the company perform as expected? 

Pontus Lindwall (PL): We performed well on the technical side and I’m happy that we stood up all the way. It was expected, but nevertheless it was something we were always thinking about. 

Commercially, it’s been good. I think the Euros were exciting with some surprises, especially in the beginning. Tournaments like this really bring up the general activity which is good. We’re happy with the outcome.

EGR: During the earnings call, it was noted that Betsson enjoyed a 92% rise in revenue for the Euros and Copa América compared to 2021. What is the company doing differently to yield such massive increases, and what changes in the market have enabled this accomplishment?

PL: That’s actually a very interesting question because when you look at it like that, it’s like, “wow, we’ve done a great job”. Actually, if we would take another time period without the tournaments, we would see a similar development. 

The fact is we managed to grow the company during that timeframe at such a rate. Now we will try to continue to grow even more and look forward to the next large championship and possibly be able to talk about even more growth in the future.

EGR: How will you capitalise on this success now that the tournaments have finished?

PL: Hopefully we have gathered some new customers. On the sports side, it’s a little bit calmer now for about a month and then it kicks off again. We’ll look to crack on as usual and try to make good offerings to the customers that brought them to the tournaments in the first place.

EGR: With the Inter Milan sponsorship deal, you made reference to the club’s history of Latin American players. Was this a determining factor in pursuing the sponsorship and something the company will look for in sponsorships moving forward?

PL:  Let’s put it like this – it’s a sizable sponsorship. Of course, we can do smaller sponsorships which have more of a local flavour. This sponsorship, being with such a big club, obviously comes with a price tag and a big commitment, so we want to be global. 

For that reason, Inter is a little bit of a special situation where they have a long heritage of players from Latam so it fits very well. If it had been a big club that doesn’t have any kind of footprint in Latam, or is not very well known there, then we wouldn’t go for it, given the footprint of our company,

EGR: You recently obtained licences in Peru for three Betsson brands. How much focus will this market have for the company going forward? 

PL: We think it’s going to continue to develop, and it’s a good market for us. Of course there are other markets in Latam which are bigger than Peru, but it’s an important market for us and we’re going to continue to invest in it.

EGR: Are there any Latam markets in particular you have your eye on?

PL: It depends on the opportunities that we get. Obviously Latam is a huge region with many countries, and they are all different, but we want to have a good coverage of the area. So, if there are opportunities for other markets where we are not that strong today, we will definitely go for it.

EGR: While your Latam presence grows, revenue in the Nordics was down YoY. How do you plan to address the slide in your home region?

PL: We’re not shutting down in the Nordics, but some countries are under re-regulation here while others are up and running. The region has its limits in how big you can become here because it’s less populated than other places. 

It’s not a large region and it’s already very well developed. Being a large company like Betsson, we cannot rely on the Nordics for our future growth.

EGR: During the quarter, the company received an AAA ESG rating from Morgan Stanley. Was there a conscious effort to move towards sustainability or was it a byproduct of existing practices?

PL: It came naturally. We think we deserve that rating and we thought we could have got it earlier. Now we do have it, it somewhat vindicates all the work that we have done for the past 20 years in this area. 

You can’t just focus on sustainability for a short time and then get a triple A rating. This is something we have been working for 20 years so we’re very happy to finally achieve that level of operating.

EGR: Do you see Betsson as an industry standard bearer in that regard?

PL: I think there are others out there that do a very good job in this area as well. It’s more that the whole industry has to work hard in this area. Sometimes this industry has a less than stellar reputation. I think things like this, getting the highest rating in a ESG evaluation, is good for us as a company but also for the industry.

EGR: This is Betsson’s 10th consecutive quarter with increased operating income. How sustainable is that going forward?

PL: We don’t want to make any predictions on that but we’ve been in a very good shape for quite some time. We don’t see any large clouds on the horizon as of now, but then again, you never know! We will keep on investing. 

The good thing is that we managed to get those profits while still investing in growth and paying higher levels of tax, relatively, quarter by quarter as more markets regulate. It’s nice and, of course, we hope that we can continue. 

EGR: Just how much will increasing tax rates play a factor into Betsson’s market activity going forward?

PL: This is something we have had on our roadmap for a very long time; that more taxes will happen. We’re a large public gaming company. We want to pay the right taxes where we operate, and now we pay more taxes than we did 10 years ago. 

That’s natural development but, at the end of the day, we make good profits so that’s the most important part.