Svenska Spel takes SEK70m operating profit hit following Swedish tax hike
State-owned operator points to GGR rate increase from 18% to 22% in July as major reason for operating profit decline as revenue also slips 9%
Svenska Spel has reported the new 22% gambling tax in Sweden has resulted in an SEK70m (£5.1m) hit to its Q3 2024 operating profit.
The state-owned operator reported operating profit for the period amounted to SEK627m, a decrease of SEK58m year on year (YoY), or 9%.
The Swedish government increased the GGR tax rate from 18% to 22% as of 1 July, in a move that has received significant pushback from operators and lobby groups.
Looking at other financial KPIs, Svenska Spel’s Q3 revenue amounted to SEK1.8bn, a 9% YoY decline compared to Q3 2023’s SEK1.9bn.
The operator said the down turn was predominantly driven by strengthened responsible gambling measures.
The group’s lottery division accounted for the lion’s share of revenue at 68%, while sports betting and casino represented 25%. Land-based operations made up the remaining 7%.
However, lottery revenue remained flat at SEK1.2bn with a 1% uptick, as bosses noted there were fewer draw days during the quarter.
Additionally, sports and casino revenue slumped 12% to SEK447m.
On a year-to-date basis, operating profit declined 15% to SEK1.6bn.
While SEK70m of the decrease was attributed to the tax hike implemented in July from 18% to 22%, the operator also pointed to one-off costs totalling SEK330m.
This related to the closure of two land-based casinos, provisions for penalty fees as well as a company restructuring, which led to redundancies at the firm.
As of 30 September, Svenska Spel’s headcount sat at 1,039, down from 1,515 in 30 September 2023.
Group revenue in the first nine months of the year slipped 5% to SEK5.6bn, with land-based closures having a major impact.
Anna Johnson, Svenska Spel CEO, said: “During the first quarter, we completed a major restructuring of Svenska Spel, among other things to create space for investments in transformation and growth.
“We have now started a review of the group’s strategy where we set the focus and direction for our priorities going forward.
“It is about investing in growth and creating long-term sustainable value for our customers, owners and employees as well as for Swedish sports and society in general. It should always be fun, easy and safe to play with us at Svenska Spel,” she added.