Under a Spel: Svenska Spel’s CEO on overcoming headwinds in the Swedish market

If an individual could pick a time to take charge of Svenska Spel, CEO Anna Johnson could not have chosen a more turbulent period for the state-controlled Swedish operator and the wider Swedish gambling market. First, there’s the troubling macroeconomic conditions, not least the fact the Scandinavian country has been in the grips of a protracted recession. Meanwhile, unlicensed online operators continue to plague the market, with a report by horseracing operator ATG in December 2024 estimating the channelisation rate sits at 70% – far short of the 90% target.

Also, the government’s four percentage point tax hike on regulated operators’ gross gambling revenue (GGR) to 22% from 1 July last year put a SEK150m (£11.51m) dent in Svenska Spel’s operating profit for 2024. On top of that, shortly before Johnson’s arrival in June 2024, the Swedish Gambling Authority hit Svenska Spel with a SEK100m fine for duty of care failings. And then there’s online gambling trade body Branschföreningen för Onlinespel (BOS) reiterating its calls for the government to remove itself from the commercial igaming market by selling off the operator.

The conditions for Johnson’s entry into the industry were far from optimal, yet under her stewardship, the lottery, sports betting and casino operator has weathered the storm as best it could. Although the company couldn’t deliver significant growth in its full-year 2024 results, flat revenue in Q4 signified a steadying of the ship in choppy waters. That said, the lottery arm, Tur, bucked the trend, enjoying its strongest-ever quarter in the final three months of 2024.

Given her 22 years’ experience at international accounting firm Grant Thornton (seven of which were as CEO of the Sweden branch), Johnson, who has a master’s degree in economics, felt prepared to meet the Svenska Spel challenge head on. Nine months in, she believes she has firmly got her feet under the table. “I have a background in auditing as CEO at Grant Thornton, so I have experience leading regulated companies where compliance is key,” Johnson says. “I feel confident in that part of driving the company forward, but everything else is new for me when you look at the gambling industry. It has been a learning experience and a really interesting time to come into a new industry.

“I think I’m quite up to speed now, and I’m looking forward to officially crossing the one-year mark. When you’ve been here a year, you recognise everything a bit better and have more experience in the industry.” Speaking to EGR on a video call from Svenska Spel’s headquarters in the town of Visby on the Swedish island of Gotland in the Baltic Sea, Johnson reflects on the initial challenges she encountered after joining. “When I came into Svenska Spel, it had just undergone quite a major transformation with organisational changes, cost reviews and so on,” she says.

“Together with my team, we started to develop a new strategy. We focused on what was important for the future, and how we could bring new engagement and energy into the organisation. Now we have a clear purpose whereby we work towards creating game enjoyment with care and give everything back to society as a state-owned company.”

The CEO adds that customer satisfaction, focusing on responsible gambling (RG) and targeting sustainable growth form Svenska Spel’s long-term ambitions. “We’re in a new phase as we have to implement the new strategy across the whole organisation, but it’s really interesting that we get to start working with a new game plan.”

First-year financials

Although Johnson joined halfway through 2024, she presided over two financial quarters, Q3 and Q4, culminating in the operator’s full-year 2024 results. For the year, Svenska Spel generated group net gaming revenue (NGR) of SEK7.7bn, down 3.7% when compared to 2023. This slip was attributed to its enhanced focus on RG measures, which negatively affected sports betting and casino. However, online net revenue grew 12% year on year (YoY) in the final three months of 2024 to account for 59% of group revenue, while Q4 operating profit jumped 10% YoY to SEK535m on the back of lower operating expenses. The same metric fell 8.7% YoY to SEK2.1bn for full-year 2024, though. However, the Q4 jump partly came at a cost with redundancies across the company.

At the end of 2023, the headcount stood at 1,443, yet it had shrunk to 1,095 by the end of Q4 2024. Johnson acknowledges that streamlining, aka staff layoffs, is a vital part of futureproofing any business.

“You always have to think about how you can be prepared for tomorrow,” she says. “As we incorporate our strategy, we’re always addressing how we can be fit for the future and have the most effective organisation to be relevant going forward. In 2024, it was quite a tough transformation because we had to get new people onboard, there was a lot of technical development, more digitalisation and so on. It’s a huge change for all organisations today.”

Even so, Johnson takes heart from the fact that the firm is moving in the right direction.

“Our most important vertical [online casino] for the future isn’t experiencing tremendous growth right now, but there is growth there,” she explains. “We’re experiencing a big decrease in casino revenue at the moment, so it’s really important for us to look at our future business and the growth there. We had to focus on where we could find sustainable growth, otherwise we’re focusing on too much and we don’t have the right priorities.”

One area of the company that performed strongly in Q4 was lottery and numbers arm Tur, which reported SEK1.4bn in net revenue, equivalent to 7% YoY growth. This was thanks in part to the strong performance of Eurojackpot, as well as the continued development of the Triss product. Tur’s growth was a long-term effort, Johnson says, while adding that Svenska Spel “really focused its priorities and resources to target growth in that area”.

Overall, Johnson remains satisfied with the company’s performance in the period she has overseen. “We’re happy with it [Q4 and full-year 2024]. We had some extraordinary costs and changes in the organisation that we handled in a good way. We have a great business for the future, but we have to focus on what is important for 2025.”

Wider problems

While Svenska Spel managed to stay on course in 2024, the difficult conditions of the Swedish market meant the firm was swimming against the tide at times. To say that July’s tax rise went down like a lead balloon with regulated operators would be an understatement. Major figures in Swedish horseracing released a joint statement slamming the decision just three days after it took effect, fuelled by the disappointment of losing out on more than SEK200m in funding from ATG as a result of the hike. In May, BOS warned that the tax rise would create more than 1,000 new problem gamblers as players switched to the black market. In October, three months after the new 22% tax rate came into effect, Swedish MP Carl Nordblom called for a reversal of the measure.

Svenska Spel said the increase resulted in an approximate SEK150m hit to operating profit in 2024. Resigned to the fact that the new tax rate is most likely here to stay, Johnson insists it will be business as usual moving forward. “Of course it’s affected us, but I don’t think it’s a huge change. I don’t think they [the government] are going to change the tax in the future, I think it’s here to stay. We give our profits back to our state owners anyway. We pay more in taxes than we do dividends, so it’s not a huge change for us.”

Elsewhere, the looming threat of the black market persists – a fear shared by operators, regulators and trade associations alike. It’s a problem in Sweden that Johnson has become all too familiar with during her nine-month reign. In a January article on Svenska Spel’s site, she claimed the poor channelisation rate was reminiscent of the market prior to regulation in 2019. The CEO also expressed frustration at the lack of progress to thwart unlicensed sites from accepting Swedish players.

“It’s the most important issue that we have in the industry,” Johnson states emphatically. “It’s an industry issue, of course, but it’s also a consumer protection issue – you don’t have any protection there for consumers at all.” Together with Sweden’s National Gambling Industry Association, Sper, Svenska Spel is doing its best to put solutions in place. “You can combat the channelisation issue in different ways. We worked together with Sper, and we have proposed measures that we could implement to support the market.

“These include investigating the possibility of blocking illegal online gambling operators, increasing the resources for support services and banning quick loans. The other important factor is shifting from a targeting criteria [assessing whether a company is targeting the Swedish market] to a participation criterion. Above all, working together is the most important thing we can do to target unlicensed operators.”

It was serendipitous that the day after Johnson spoke to EGR, the Swedish government announced a review into Sweden’s Gambling Act. It asserted that the review “will contribute to more unlicensed operators being excluded from the Swedish gambling market”. The review is also expected to focus on closing the loophole that allows unlicensed operators to remain freely active in the market if their sites don’t include the Swedish language or payment methods in Swedish krona. This will signify the switch to the participation criteria Johnson believes is so crucial.

Restricted access to unlicensed operators will help to limit the number of at-risk gamblers in the Swedish market, according to BOS’ May 2024 report detailing the knock-on effects of the gambling tax increase. The careful handling of high-risk players is one area where Svenska Spel insists it is making a difference. Management declared that 93.9% of its 2024 revenue came from what are labelled “healthy” customers. “You have to keep developing your technical capabilities in order to help you find more of those healthy players,” Johnson points out. “It’s really important to have a balance when you’re operating for profit and talking about growth but also looking out for players with gambling problems. One of the things I find most exciting about the gambling industry is that you really have to invest in the technology to help you address those issues. In our resource planning, we’re always working on how we can be more effective in finding those at-risk players.”

Like any business in the sector, Svenska Spel is stuck between a rock and a hard place with financial targets to hit while ensuring the safety of its customers’ spending habits. However, Johnson doesn’t believe the company needs to decisively shift towards one side. “Balance is key because if you focus too much on chasing high revenue, you won’t have any business. It’s not so easy to just focus on one side or the other. For us, it’s most important to have the risk here as we could see the different types of risk in our products. On the lottery side we have very little risk, and that’s the biggest revenue source for us. So, we have to focus our resources on online casino because it carries the most risk.”

External pressures

No country’s gambling industry can exist in its own bubble as a myriad of economic and political issues can dictate the actions of companies in the sector. Sweden isn’t any different. The ministry of finance confirmed the country slipped into recession in August of last year, while Johnson herself highlighted Sweden’s “weak economy” during the company’s latest financial results. The government is confident green shoots of recovery are starting to appear however, and Svenska Spel’s chief remains assured the business – and the industry as a whole – won’t be too adversely affected.

“The recession has had an effect, but I don’t think it has been the biggest inhibitor of our growth. Naturally, people don’t have that much money to spend on gambling but I don’t think that has had a big impact on us. We really have to focus on what we can do for our customers to drive the underlying growth we need. In such a tough time, I think people really like to have that kind of experience [such as gambling] in their life. We have more than four million customers, so maybe it might impact a little in the future, but not so much.”

Svenska Spel’s position as a state-owned operator could, in theory, put Johnson in a compromising position with regard to calling out government policy – raising GGR tax from 18% to 22% springs to mind. While she wouldn’t be drawn on calls from BOS for the government to sell Svenska Spel, she is willing to make her thoughts known when necessary.

“I don’t think it’s hard [speaking out against government policies]. We have a strong opportunity to present our views within the industry together with the likes of Sper and other associations. We can see what is going on within the industry and, through mediums such as articles and seminars, we can share our views without any problems.”

Johnson will continue to face more hurdles at Svenska Spel going forward. The long-standing issues with the Swedish market aren’t going away any time soon, and it’s uncertain what the government’s review into the Gambling Act will mean for operators across the country. Longer term, it remains to be seen how well Johnson’s first nine months in charge have equipped her to deal with these problems in the future.