Swedish online gambling operator Betsson AB saw its shares plummet as much as 20% on Wednesday on the Stockholm Stock Exchange after releasing preliminary first-quarter results that revealed a 47% year-over-year decline in operating profit. The stock closed 14.4% lower at SEK 90.10, continuing a volatile period that saw a similar 21% single-day drop in January following a Q4 2025 preliminary update.
Key Financial Highlights: Profit Halved, B2B Segment Crushed
Betsson reported Q1 2026 revenue of €285 million, down 3% from €294 million in the same period last year. Operating profit (EBIT) tumbled 47% to just €34 million from €64 million—marking the steepest quarterly profit decline in the company's recent history.
The main driver was a 43% collapse in B2B licensing revenue to €51 million from €90 million. This segment's contribution to group revenue shrank from 31% to 18% in a single quarter. The company attributed the decline to reduced revenue from a specific, undisclosed B2B client.
Industry analysts have long pointed to Realm Entertainment—which operates unregulated Turkish gambling brands such as Bets10 and Casino Metropol—as the struggling partner. Turkey's ongoing crackdown on illegal gambling has weighed on Betsson for several quarters; B2B revenue had already fallen 13% in Q4 2025 before accelerating to the current 43% plunge.
CEO Pontus Lindwall stated that the client's activity level has stabilized since December but acknowledged the segment continues to pressure group results. He also noted that multiple unprofitable B2C markets are draining €10–15 million in operating profit per quarter.
Regional Divergence: Latin America Surges, CEECA Slumps
Performance varied sharply across Betsson's key markets:
- CEE & Central Asia (CEECA): The group's largest segment and most exposed to B2B, revenue fell 21% to €96 million.
- Nordics: Declined 18% to €31 million.
- Western Europe: Rose 9% to €61 million.
- Latin America: Stood out with a 24% jump to €93 million, making it the fastest-growing region.
By product, casino revenue edged down slightly while sportsbook revenue was flat, but the sportsbook margin improved from 8.0% to 8.4%. Gross margin plunged from 64% to 57.6% due to a revenue mix shift away from high-margin B2B licensing toward lower-margin locally regulated markets. The tax burden rose from €45 million to €53 million.
Strategic Shift: Regulated Market Share Hits Record 73%
Reflecting its strategic pivot away from grey-market dependence, Betsson said income from locally regulated markets reached a record 73% of total revenue, up from 59% a year earlier. The company continues to hold one of the largest sponsorship deals in iGaming—the front-of-shirt sponsorship of Inter Milan, reportedly worth around €30 million annually over four years. To circumvent Italy's 'Dignity Decree' banning gambling advertising, the deal is structured under the Betsson Sport infotainment brand.
Looking ahead, Betsson noted that average daily revenue in early Q2 is running 9% higher than the same period in 2025. The full interim report for Q1 is scheduled for release on April 24.
While the B2B shock has rattled investor confidence, the company's continued push into regulated markets and strong growth in Latin America could provide a foundation for recovery—if the headwinds from its remaining grey-market exposure can be managed.