Betsson Q1 revenue grows 12% as Latam offsets regulatory headwinds in Europe

Betsson Group has reported a 12% rise in revenue to €157.4m (£138m) for Q1 2021.

Casino revenue increased by 16% to €116.3m for the three-month period to the end of March, while sportsbook revenue came in flat at 2%, or €38.9m, on a betting margin of 7.2%.

First quarter EBITDA also saw movement of 2%, rising to €35.7m, up from €34.9m in Q1 of last year on an EBITDA margin of 22.7%.

Active customers increased by 39% to 948,109 during the reporting period.

Betsson witnessed strong Q1 revenue growth and profitability in Italy, Peru and Chile, as well as Croatia, which displayed high levels of activity following the launch of acquired casino brand Rizk.

The Stockholm-listed operator continues to suffer from headwinds elsewhere however, particularly in Germany, where transitional period regulations have led to a sharp downturn in revenue, although CEO Pontus Lindwall said Q1 had improved from the 80% downturn reported in Q4 2020.

Betsson is currently live with Betsson, Rizk and RaceBets in Germany after having removed several brands from the country due to the ongoing regulatory impact.

Elsewhere, Norway has proved a drag on Nordics revenue, where Betsson has had to rely on its proprietary payment solution.

“In Norway, which is not a locally regulated market, the supply of efficient payment solutions is less than in regulated markets, which from time to time affects Betsson’s revenue streams and places higher demands on commercial adaptation and technical solutions for integration of new payment methods,” reported the operator, although Lindwall refused to elaborate when pressed by analysts.

Q1 Nordics revenue fell flat at 1% growth to €48.1m, with Sweden was boosted by pay and play brand Jalla Casino despite the country’s extended restrictions on deposit and bonus limits.

Revenue from Western Europe decreased 6% to €37.9m in Q1, while revenue from Central and Eastern Europe and Central Asia jumped 27% to €53.5m.

Rest of World revenue soared 75% to €17.9m, while Lindwall revealed Betsson was in discussions to hive off Latam as its own reporting segment due to particularly strong growth in the region.

Betsson is currently adapting its sportsbook for the US market, initially with the intention to offer it as an operator in Colorado, while preparing a B2B sportsbook model for the rest of the US.

The work of tweaking the sportsbook for the US market was further intensified in April after Betsson struck an agreement with TG Lab to integrate its new US-facing Player Account Management (PAM) system.

More than 170 people are working within sportsbook product development at Betsson at present, while 120 staff are engaged with the US adaption and integration onto the TG Lab PAM.

Looking ahead to Q2, average daily revenue until 25 April was 12% higher than the whole of Q2 2020, or 24% higher when adjusted for negative currency effects.

Betsson’s share price climbed by 3% in early trading on Nasdaq Stockholm to SEK80.65 (£6.92).