Foreign based gambling firms’ growth in Sweden driven by casino, but sports betting still important

Foreign based gambling operators, such as Bet365, Kindred (Unibet parent) and Betsson are commanding a continuously bigger slice of the Swedish gambling market pie. According to Sweden’s gambling authority, Lotteriinspektionen, the foreign based firms grew their total gross winnings revenue (turnover after payout of gamblers’ winnings) by 17 percent during H1 2017 on a yearly basis, obtaining a 24% share of the Swedish market. At the same time, operators regulated in Sweden, such as Svenska Spel and ATG, reported neither positive nor negative growth, thus losing in market shares.

Ahead of the upcoming re-regulation of the Swedish gambling industry, there is an ongoing race among the many different stakeholders on the market to position themselves, leading to extensive marketing campaigns and a strong focus on customer acquisition and engagement. In this post, we will take a closer look at the two most important gambling verticals for foreign based operators, i.e. online casino and sports betting.

Mediavision has previously noted that the online casino vertical currently works as the main growth engine among foreign based operators. This is consistent with reports from the two biggest publicly listed foreign based operators, Kindred and Betsson, as both have a majority share of their gross winnings revenue generated by casino games, at 51 and 74 percent respectively, during Q2 2017.

However, several casino focused operators, such as Leovegas and Mr Green, have started to put an increased emphasis on sports betting, both having launched their sportsbooks late in H1 2016. Most major foreign based operators now offer both casino games and sports betting, attempting to cater to a broader audience (increased own customer base) and to satisfy a greater range of their own players’ gambling demands (increased ARPU). This is certainly also true for other gambling verticals, mainly bingo, poker and horse racing, although to a lesser extent.

One reason for gambling operators to offer both casino and sports betting is age. During the first half of 2017, both foreign based sports betting (i.e. excluding Svenska Spel) and online casino generated 4 percent in monthly reach among 18-74-year-old Swedes, respectively, according to Mediavision’s data. However, among young (18-24) foreign based sports betting attracted 6% on a monthly basis, compared to 4% for online casino. This suggests that offering sportsbooks has a greater potential as a gateway to attract the youngest group of gamblers to your own brand.

This far, the overlap of online casino gamblers and sports punters (Svenska Spel excluded) is relatively small. During the first half of 2017, approximately a fifth of all who gambled on foreign based sports betting also gambled on online casino, and vice versa, during an average month. As several big brands become less niched, specialized primarily in one gambling vertical, and move towards becoming more of full-service, one-stop shops for punters, the aim is surely to increase these customer overlaps.

Currently, gambler overlaps vary significantly among different brands. Overall, top sports brands, such as Bet365 and Unibet, display a relatively low share of sports punters who also gamble on casino (both at approximately 10 percent) while big casino oriented brands, such as Leovegas and Mr Green, display shares of 20 percent and upwards. However, the share of casino gamblers that also gambled on sports is much higher for Bet365 and Unibet compared to competitors. Approximately 30 percent of casino gamblers on Bet365 and Unibet also gambled on sports via the same brand. In other words, all operators currently have the potential to improve overall engagement and gambling activity in their own customer bases.

For more information contact Arvid Åsbrink, Senior Consultant at Mediavision.