Swedish online gambling operator Betsson AB suffered a sharp stock decline of up to 20% on the Stockholm Stock Exchange on Wednesday after releasing preliminary first-quarter figures showing operating profit slumped 47% year-on-year due to a severe downturn in its B2B licensing segment. The stock closed at SEK 90.10, down 14.4% from the previous session's SEK 104.80, marking the second major sell-off in 2026 following a 21% drop in January when Q4 2025 preliminary results disappointed.
Key Financial Metrics Deteriorate
Betsson reported Q1 2026 revenue of €285 million, down 3% from €294 million in the same period last year. Operating profit (EBIT) plunged 47% to €34 million from €64 million, representing the most dramatic quarterly profit decline in the company's recent history. The B2B license segment was the primary culprit, with revenue dropping 43% to €51 million from €90 million, reducing its contribution to group revenue from 31% to 18% in just one quarter.
The company attributed the decline to reduced revenue from an undisclosed B2B customer. Industry analysts have long pointed to Realm Entertainment, an operator serving the unregulated Turkish gambling market under brands such as Bets10 and Casino Metropol, as the underperforming partner. Ongoing crackdowns on illegal gambling in Turkey have weighed on Betsson for several quarters. B2B revenue had already fallen 13% in Q4 2025 before accelerating to a 43% decline in Q1 2026. CEO Pontus Lindwall acknowledged the segment continues to pressure group performance, though he noted activity levels from that customer have stabilized since December. He also highlighted that several unprofitable B2C markets are dragging down operating profit by €10-15 million per quarter.
Regional Performance Diverges Sharply
Geographically, results were mixed. Latin America was the standout performer, growing 24% to €93 million. Western Europe rose 9% to €61 million. However, the company's largest segment, CEECA (Central & Eastern Europe and Central Asia), which has the highest exposure to B2B, fell 21% to €96 million. Nordic revenue declined 18% to €31 million. The shift in revenue mix from high-margin B2B licensing to locally regulated markets caused the gross margin to drop from 64% to 57.6%. Tax expenses increased from €45 million to €53 million. Sportsbook revenue remained flat but margins improved slightly to 8.4% from 8%, while casino revenue saw a modest decline.
Betsson emphasized that revenue from locally regulated markets reached a record 73% of total, up from 59% a year ago, reflecting its strategic pivot away from gray markets. The company also holds one of the most expensive sponsorship deals in iGaming, serving as the front-of-shirt sponsor for Inter Milan through its Betsson Sport brand in a four-year deal reportedly worth around €30 million annually, designed to circumvent Italy's 'Dignity Decree' banning gambling advertisements.
Outlook and Upcoming Report
Betsson noted that average daily revenue in the early days of Q2 is tracking 9% higher than the same period in 2025. The full Q1 interim report is scheduled for release on April 24. DNB Carnegie had already cut its price target from SEK 190 to SEK 120 following the January event, and the latest plunge has further shaken investor confidence. Analysts will be watching for additional details on B2B stabilization and cost measures when the complete report is published.