Betsson Breaks Records on Revenue and Customers — Then Pays For Them in Gross Margin
A World Cup-inflected LatAm surge pushed revenue to an all-time high, but the mix shift into taxed, B2C-heavy markets took 31% out of operating income
BETS-B.ST · Earnings Call · 2026-10-22
Two records and one uncomfortable number
Betsson's third quarter delivered exactly the headline set a gaming operator wants to print: group revenue of EUR 327 million, up 10% and the highest for any single quarter in the company's history; casino revenue up 14% to a record and now 77% of the group; and active customers up 40% year-on-year to just under 1.9 million. Management leaned hard on the casino product, and with reason — the sportsbook did not carry the quarter. “This is particularly positive given that the sportsbook margin was considerably lower than in the second quarter, due to player-friendly results in the European football leagues and cups.” — Pontus Lindwall, President and CEO · 2026-10-22 That sportsbook margin came in at 8.1%, below 8.8% a year ago and below the two-year rolling average of 9%. Fine — results variance happens, and the casino absorbed it. The problem is what happened below the revenue line. Operating income fell 31% to EUR 46 million, and the EBIT margin of 14.1% sits against 22.6% a year earlier. Gross profit actually declined EUR 9 million to EUR 181 million, a 56% margin versus 64%. So the record quarter was a less profitable quarter. That is the story, and management knows precisely why.The taxman took the incremental revenue
Two mechanical forces, both structural rather than seasonal. First, gaming taxes rose by roughly EUR 28 million, with locally regulated markets now 78% of revenue versus 64% a year ago. Second, B2C revenue is now 86% of the group, and B2C carries payment-provider fees that B2B system delivery does not. Martin Öhman's point that the gross-profit line is largely outside management's control is the important admission here — “some of them are things that we cannot impact, such as gaming taxes... what we can do in order to leverage our operational model is increase the B2C revenue.” — Martin Öhman · 2026-10-22 That is a business model where the only lever left is scale, not price.We have seen for quite some time now that we are growing our locally regulated revenue, which come with increased gaming taxes. We have also seen a shift towards more B2C revenues rather than B2B revenues... What we have seen over quite some time now is a kind of negative shift in the gross margin.
A World Cup customer base bought at a discount
Latin America grew 52% to a record and now represents 36% of the group, its largest region. The World Cup was the engine: more than 800,000 customers served and over 20 million bets taken, with full platform uptime. This is not a Betsson-only phenomenon — the global theme set has football match volume spiking on World Cup scheduling, and peer reporter VPLAY-B.ST flagged World Cup football matches in the same window. Sector-wide event marketing, in other words, not a proprietary edge. Which makes the arithmetic worth staring at. Active customers rose 40%, but customer deposits rose only 6% and sportsbook turnover 8%. Marketing spend rose EUR 7 million to 15% of B2C revenue — around 20% including affiliates. Betsson bought a very large cohort of new customers at a moment of peak acquisition cost, and the revenue per customer is diluting. Pontus Lindwall was candid about the retention question: “not all customers that came in will continue to be customers forever. We have as most companies and most industry, a level of churn.” — Pontus Lindwall, President and CEO · 2026-10-22 The bull case is that the customer base resets to a higher platform, as it has after past tournaments. The bear case is that this cohort was acquired in a promotional arms race and will monetise below the group average.The B2B hole management calls "stabilized"
The quarter's real sore point is buried in the regional detail. Total B2B business revenue fell 39%, or EUR 30 million, driven by a single large customer, and the CEECA region dropped 17% on lower licensed revenue for system delivery. B2B is now just 14% of the group — and it was the high-margin revenue that is disappearing precisely as the low-margin B2C revenue scales. “We have communicated that our B2B business has stabilized, and we are very grateful for that.” — Pontus Lindwall, President and CEO · 2026-10-22 Stabilized at a level 39% below last year and slightly down sequentially is a generous use of the word. Management's argument — that existing clients grow with their markets and new clients can be layered on — is plausible but unproven, and it is now the single biggest swing factor in whether the gross margin finds a floor.Brazil, Belgium, and the discipline trade
The strategic counterpoint to all this margin gloom is Brazil, where Betsson has conspicuously not spent. The market banned internet gaming, and rivals took the hit.That restraint is a genuine capital-allocation signal in a sector that habitually overpays for regulated-market entry. It is the same discipline visible in the acquisition of Rhino — a Canadian B2C business plus B2B technology assets for EUR 59 million in cash, adding two months of contribution and lifting Rest of World revenue 106% — and in the Belgium rebrand of betFIRST to the Betsson master brand. The balance sheet supports it: EUR 98 million net cash and a 61% equity ratio. The catch is the forward setup. Fourth-quarter daily revenue is running 11% above last year's Q4 average, which sounds strong until you read the rest of the sentence: the sportsbook margin in early Q4 has been significantly below the eight-quarter average. Growth in customers, growth in revenue, continued pressure on margin — the same trade, one quarter further along.I think we use the expression that we are on the grandstand a bit, and we watch it from the sideline... Looking in the rear mirror, this is not something that we regret.