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  • Q&A: Betsson’s Pontus Lindwall on sportsbook margins and Peru’s regulatory shift
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NEXT.io sat down with Betsson AB CEO Pontus Lindwall following publication of the group’s Q4 2023 results to discuss a decline in sports betting revenue, among other topics.

Betsson highlighted a historically low sportsbook margin of 6.2%, partly attributed to customer-friendly football results, an issue that first surfaced in Q3 2023.

NEXT: Bayern Munich lost 1-0 against Lazio in the Champions League on Wednesday. How happy are you about that result?

PL: I didn’t care much about that game, but from a sports betting results perspective, it was pretty good.

NEXT: One executive recently described October as a “bloodbath”, with November and December showing slight improvement. Do you agree with this assessment?

PL: In a way, yes. October was a tough month, and November and December were better. However, I do not agree that the sportsbook margins should be more stable.

If the sportsbook margin were, let’s say, a flat 8% every single month, what would be the reason for players to play, knowing they will lose 8%? That’s not very attractive.

The allure lies in the fact that players sometimes get lucky, and that’s the beauty of sports—anything can happen.

I think sometimes we make too much noise about periods with lower sportsbook margins. We should be happy because that’s what makes our service attractive to end users.

NEXT: You also mentioned that the sportsbook margin was “significantly lower” in the early weeks of Q1 2024. How quickly do you think Betsson and the wider industry can recover from this?

PL: It’s always hard to predict the future, especially with sports, but I can say that we’ve had shorter periods of weaker sports margins before, and then we recover. 

It’s not a big deal, especially for a well-funded company like Betsson. We don’t have problems paying out to players. We do that with a smile, and that’s part of the business.

NEXT: Let’s discuss Peru. You reported a revenue decline in Peru. Was this decline a contributing factor to the overall drop in sportsbook revenue?

PL: Yes, it was. Peru is a sportsbook-heavy market for us compared to other markets where we operate.

In Q4 2022, we had the football World Cup, which drove a lot of activity, and then in Q4 2023, there was no big championship, and on top of that, a weak sportsbook margin. 

That makes a difference, but it’s going to bounce back. We’re looking forward to the Copa America.

NEXT: Peru’s new gambling regulations have just come into effect and active operators have one month to apply for a licence. How far along are you in preparing your application?

PL: I don’t follow it daily, but we are lined up to make use of that market once it becomes regulated.

NEXT: Looking ahead, what are your expectations for the future development of the Peruvian market?

PL: It’s hard to tell. We’re going through the process of regulation now. In general, we believe in regulations that allow us to offer a competitive, attractive product.

That’s necessary because if not, customers will play outside of regulation. We have a strong position in that market and we are looking forward to a regulated future not only in Peru, but in the wider Latam region.

NEXT: Your B2B sportsbook product has yet to sign a customer in the US. We’ve seen Kindred Group pull out of the US. Will Betsson be next?

PL: The situation is different because we, unlike Kindred, only went to the US with a B2B offering.

We are already supplying our sportsbook to many other markets, and it’s the same product that we use successfully elsewhere. 

Every euro we invest in that sportsbook benefits us and our partners. We’re not dependent on the US market in that regard. We will continue to offer the sportsbook there for the time being and see how it develops.

NEXT: Given that it’s the same product as in other markets, why are you not signing new customers in the US?

PL: I think we have simply put more effort into developing other markets, particularly Latam. But looking at the Q4 figures, I think we have made the right decision.

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