Betsson AB reported a 23% decline in third-quarter EBITDA despite record revenue, as higher gaming taxes, reduced B2B licensing income, and rising operating expenses weighed on profitability.
EBITDA fell to €63.4 million ($71 million) from €82.5 million, narrowing the margin from 27.9% to 19.4%. Operating income declined 31% to €46.1 million ($51.6 million), while gross profit dropped 5% to €181.1 million ($202.8 million).
The earnings pressure coincided with a shift toward locally regulated markets, which accounted for 77.7% of revenue, compared with 63.8% a year earlier. Betting duties increased from €41.4 million to €69.4 million ($77.7 million), while operating expenses rose from €122.9 million to €135 million ($151.2 million).
During the earnings call, CFO Martin Öhman disclosed that B2B revenue had declined 39%, or approximately €30 million ($33.6 million), largely because of reduced activity from an unnamed major client. B2C revenue increased 28%, but a hike in direct gaming taxes contributed to a contraction in the gross profit margin from 64% to 56%.
“We have seen for quite some time now that we are growing our locally regulated revenue, which comes with increased gaming taxes,” Öhman told analysts. “We have also seen a shift towards more B2C revenues rather than B2B revenues. So there’s a mixed effect there.”
Group revenue increased 10% year-on-year to €326.5 million ($365.7 million), including 8% organic growth. Nine-month revenue reached €922.1 million ($1.03 billion), up 3.2%.
Casino revenue rose 13.7% to €253.5 million ($283.9 million), accounting for 77% of group revenue. Sportsbook revenue increased just 0.8% to €71.8 million ($80.4 million), representing 22%, as margins after free bets declined from 8.8% to 8.1%.
Active customers surged 40% to a record 1.87 million, supported by the 2026 FIFA World Cup and the start of major domestic football seasons.
Geographically, Latin America led growth, with revenue increasing 51.8% to €116.1 million ($130 million), representing 36% of group revenue. Argentina, Peru and Colombia drove the performance, while Betsson maintained leading market positions in those countries and Chile.
Western European revenue increased 13.8% to €64.8 million ($72.6 million), supported by Italian casino operations. Revenue in Central and Eastern Europe and Central Asia declined 16.8% to €99.2 million ($111.1 million), while Nordic revenue fell 10% to €32.7 million ($36.6 million).
Rest of the World revenue surged 106% to €13.7 million ($15.3 million), supported by expansion into Alberta and Ontario following Betsson’s €64.5 million ($72.2 million) acquisition of Rhino Entertainment in August. The company also rebranded betFIRST in Belgium and secured a €75 million ($84 million) revolving credit facility in July.
Addressing Brazil’s recent gambling ban, CEO Pontus Lindwall said Betsson’s limited marketing expenditure had reduced its exposure compared with competitors, while expressing expectations of future regulatory changes.
Looking ahead, Betsson reported average daily revenue through October 18 was 11% above the fourth-quarter 2025 average, although sportsbook margins remained below their eight-quarter average. Shares rose from SEK 93.75 at the previous close to SEK 96 at 10:25 a.m. GMT.