EGR Power 50 2020: LeoVegas (10)
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10. LeoVegas (13)
FINANCIALS: Q3 revenue of €88.9m was down 19.6% on the record-high of €110.7m in Q2 driven by the lockdown ending and the return of sport
STRATEGY & IMPACT: One of the original mobile-first casinos, LeoVegas remains a gaming-heavy operator as it uses a Kambi sportsbook mainly for cross-sell purposes
GEOGRAPHIC REACH: Nordics and ‘Rest of Europe’ account for the lion’s share of NGR – 35% and 47% respectively. The regulating German market represents around 17% of group revenue
INFLUENCE & LEADERSHIP: With CEO and co-founder Gustaf Hagman involved since the outset in 2011, LeoVegas has gone from start-up to one of Europe’s leading operators
LeoVegas was another operator to benefit from lockdowns and the shift online across Europe, reflected in the pronounced surge in Q2 revenue to an all-time high for the company of €110.7m – up 17% on the same period last year and 24% on Q1. Furthermore, depositing customers rose 24% in Q2 to almost 435,000 and NDCs increased 30% year-on-year to more than 195,000. The operator’s solid performance goes some way to explaining why LeoVegas glides back into the Power 50’s top 10 in 2020 after slipping from 10th to 13th last year.
Yet, things haven’t been all plain sailing; the operator has been impacted by the temporary restrictions on deposits and bonuses imposed in Sweden from July and this was a contributing factor as to why the Nordics, which made up just over a third of group NGR in Q3, saw a 20% year-on-year decline in revenue during the period. Being a casino-centric operator accentuates the hit from Sweden’s draconian regulations. Although Sweden remains a deeply challenging environment, especially with online casino channelisation estimated to be as low as 70%-75%, there were positives in Finland this year as LeoVegas launched GoGoCasino, Royal Panda and LiveCasino.com.
Casino (mainly slots) and live dealer games accounted for a combined 93% of the Stockholm-listed group’s GGR in Q3, with sports betting responsible for the remaining 7% (just 4% in Q2 due to the pandemic). However, LeoVegas branched out into bingo in October with an initial launch in the UK where permitted pre-watershed TV ads (for now at least) for the product will have boosted user acquisition and brand awareness. Launches in additional markets are planned as a means of product diversification and acquiring different demographics.
While LeoVegas has historically been a well-managed online casino, industry observers harbour doubts about where future growth is going to come from. Analysts have suggested the regulatory headwinds in the Nordics are likely to get worse before they get better, including the hike in online gaming tax in Denmark from 21% to 28% starting January 2021. Then there’s the hit to revenue in Germany, which is due to regulate next year and is perhaps 35%-45% of LeoVegas’ ‘Rest of Europe’ segment. These shifting plates could mean extra emphasis next year on growing the ‘Rest of World’ portion above 18% (Q3) or perhaps further acquisitions, or even a foray into the US.