Swedish online gambling heavyweight Betsson AB saw its stock fall as much as 20% on Wednesday on the Stockholm Stock Exchange after releasing preliminary first-quarter 2026 results revealing a dramatic 47% decline in operating profit, largely caused by a steep drop in its B2B licensing business.
Key Q1 Financial Highlights
Betsson reported Q1 2026 revenue of €285 million, down 3% from €294 million in the same period last year. Operating profit (EBIT) fell sharply from €64 million to €34 million, marking what the company described as one of its steepest quarterly profit declines in recent history. B2B licensing revenue plunged 43% from €90 million to €51 million, reducing the segment's share of group total revenue from 31% to just 18% in one quarter.
Following the announcement, Betsson shares sank as much as 20% during intraday trading before closing 14.4% lower at SEK 90.10, compared to the previous day's close of SEK 104.80. This sell-off follows a similar 21% one-day crash in January when the Q4 preliminary figures were released, prompting DNB Carnegie to slash its target price from SEK 190 to SEK 120.
B2B Segment Hit Hard by "Suspicious Customer" Investigation
Betsson attributed the B2B revenue slide to decreased income from a specific undisclosed B2B customer. Industry analysts have long pointed to Realm Entertainment, which operates brands like Bets10 and Casino Metropol in Turkey's unregulated gambling market, as the underperforming partner. Turkey's ongoing crackdown on illegal gambling has weighed on Betsson's earnings for several consecutive quarters: B2B revenue had already fallen 13% in Q4 2025 before accelerating to the current 43% decline.
CEO Pontus Lindwall stated that the customer's activity levels stabilized after December but acknowledged that the segment continues to drag on group performance. He added that several unprofitable B2C markets are eroding €10-15 million in operating profit per quarter.
Regional Performance Diverges: Latin America Surges 24%, CEECA Drops 21%
Among Betsson's key geographies, results were mixed. The Central and Eastern Europe & Central Asia (CEECA) region—the company's largest segment and most exposed to B2B—saw revenue fall 21% to €96 million. The Nordics declined 18% to €31 million, while Western Europe grew 9% to €61 million. Latin America was the standout, posting a 24% revenue jump to €93 million.
Casino revenue edged slightly lower, while sportsbook revenue was flat but margin improved to 8.4% from 8.0%. Gross margin fell sharply from 64% to 57.6% as the revenue mix shifted from higher-margin B2B licensing to locally regulated markets. The tax burden increased from €45 million to €53 million.
Strategic Shift and Outlook
Betsson highlighted that revenue from locally regulated markets reached a record 73% of total, up from 59% a year earlier, reflecting its strategic pivot away from reliance on gray markets. The group also holds one of the iGaming industry's biggest sponsorship deals—the front-of-shirt sponsor for Serie A club Inter Milan. The four-year agreement, reportedly worth around €30 million annually, is structured through its infotainment brand 'Betsson Sport' to circumvent Italy's ban on gambling advertising under the 'Dignity Decree.'
Looking ahead, Betsson said average daily revenue in the first 10 days of Q2 2026 was 9% higher than the same period in 2025. The full Q1 interim report is scheduled for release on April 24.