Shares of Swedish online gambling operator Betsson AB fell as much as 20% on Wednesday before closing at SEK 90.10, down 14.4%, after the company released preliminary Q1 2026 results showing a 47% drop in operating profit due to a sharp decline in B2B license revenue.
Q1 Profit Halved as B2B Segment Drags
Betsson reported Q1 revenue of €285 million, down 3% from €294 million a year earlier. Operating profit (EBIT) plunged to €34 million from €64 million, marking the steepest quarterly profit decline in recent history. The culprit was B2B license revenue, which tumbled 43% to €51 million, shrinking its share of total revenue from 31% to just 18% in a single quarter.
Management attributed the decline to reduced activity from an unnamed B2B customer. Industry analysts have long identified that customer as Realm Entertainment, which operates brands like Bets10 and Casino Metropol in Turkey's unregulated gambling market. 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 43% in Q1 2026.
Regional Divergence: Latin America Shines, CEECA Weakens
Regional performance showed stark contrasts: Latin America surged 24% to €93 million, while the company's largest segment, Central & Eastern Europe and Central Asia (CEECA), declined 21% to €96 million. Nordic revenues fell 18% to €31 million, and Western Europe rose 9% to €61 million.
Casino revenue edged lower, while sportsbook revenue was flat with margins improving slightly to 8.4% from 8%. The shift away from high-margin B2B licensing toward locally regulated markets caused gross margin to drop from 64% to 57.6%. Tax expenses increased from €45 million to €53 million.
Strategic Shift and Early Q2 Signal
Betsson emphasized that revenue from locally regulated markets reached a record 73% of total, up from 59% last year, reflecting its strategic pivot away from gray markets. The company also holds one of the iGaming industry's priciest sponsorship deals—the front-of-shirt sponsor for Inter Milan, valued at around €30 million annually, carried under the “Betsson Sport” brand to circumvent Italy's gambling advertising ban under the “Dignity Decree”.
CEO Pontus Lindwall noted that the problematic B2B customer's activity levels have stabilized since December, but the segment continues to pressure results. Several unprofitable B2C markets are also eating €10–15 million in operating profit each quarter. On a positive note, average daily revenue in the first few days of Q2 was 9% higher than the same period last year. A full interim report is scheduled for release on April 24.
In a separate development, iGaming CRM platform Optimove acquired Smartico—its fourth such deal in the space—as consolidation in the gaming CRM market continues. Both brands will operate independently.