President & CEO, Betsson
Betsson Q1: Navigating Margin Squeeze | Ep. 761
In today's episode of iGaming Daily Host Charlie Horner is joined by special guest Pontus Lindwall CEO of Betsson AB and SBC Editor-at-Large Ted Menmuir as the trio delve into Betsson’s Q1 2026 results, navigating the stark contrast between record B2C customer engagement and the mounting margin pressures of a maturing European market.
Tune in to today's episode to find out:
How Betsson is managing a significant 47% slump in operating income amid rising global gaming taxes.
The primary reasons behind the sharp €40m revenue drop in the B2B segment and the path to recovery.
Why Latin America r...
About Pontus Lindwall
Pontus Lindwall, President and CEO of Betsson, spoke at an event titled "Gaming in the Nordics 2026" in Copenhagen on July 1, 2026. He discussed the regulatory landscape across five Nordic markets, describing them as "all in motion." Lindwall said he expects new regulation in Finland to take effect on July 1, 2027, and expressed hope that Finland would model its rules on Sweden and Denmark rather than Norway. He characterized Finland as "a monopoly in transition." Regarding Iceland, he stated that the country has "like 0% channelization" because no regulated online business currently operates there, though he noted that some Icelandic attendees had told him regulation is forthcoming. Lindwall also commented on other European markets. He said Betsson had been "forced to exit UK and Germany," describing the UK as having "cranked up the taxes" and Germany as having "over restriction." He argued that "good regulation is good business for players, society and operators alike" and stated that "channelization is the scoreboard" for evaluating regulated markets.
Transcript (40 segments)
P
Pontus Lindwall0:00
The UK and Germany, two powerhouses of nations with a lot of gaming history, good economical foundations, but we don't consider them investable as a company, so we'll leave them for someone else to invest in.
C
Charlie Horner0:25
Welcome back to iGaming Daily supported by OptiMove, the creator of positionless marketing and the number one player engagement solution for sports betting and iGaming operators. I'm Charlie Horner, and today I'm joined by SBC Media's editor-at-large Ted Menmuir. And we're also joined by Betsson CEO Pontus Lindwall as the international operator reports its Q1 results. Pontus, thanks ever so much for joining us. How are you doing?
P
Pontus Lindwall0:51
Yeah, good. Yourself?
C
Charlie Horner0:52
Yeah, very well, thank you. Very well. Just before we dive into things, I'll just have a little rundown of some numbers. So, group revenue €285.3 million, a decrease of 3%. Casino revenue decreased 4%, sports book revenue increased 1% at a margin of 8.4% and EBITDA at €50 million. I guess the first question really is how do you reflect on Betsson's overall performance in Q1 against your initial expectations?
P
Pontus Lindwall1:24
Yeah, I think it's good. We saw a drop down during the second half of last year in the B2B business. It stabilized by the end of the fourth quarter last year. And we see strong growth in our B2C operations, especially in our core markets where we put most of our efforts. So, in general, quite good, I would say.
C
Charlie Horner1:52
And so, I guess it's a bit of a margin squeeze impacting EBITDA and profit. I guess there's lots of factors that go into that mainly sort of 2026 as a whole just providing a tough backdrop. But also I guess it must be noted that B2C revenue is strong and growing well. How do you factor all that into your reporting this quarter?
P
Pontus Lindwall2:19
Yeah, it's a factor what we indicate that the B2C business is performing strongly, but they come with a totally different cost structure. We pay a lot of gaming taxes. We invest in marketing. So whereas the B2B business we don't have those costs and obviously what we saw last year a little bit of a drop down in the B2B, it has an impact on the profitability of the company. But most important right now is that we have seen the B2B business stabilize and from here on we're going to do our best to make it grow again and B2C already on a good growth path. So yeah, that's where we stand.
C
Charlie Horner3:08
Fantastic. And Ted, let me bring you into the conversation. Is there anything you'd like to put to Pontus?
T
Ted Menmuir3:13
Yeah, just look beyond kind of financial metrics like your bets and stuff especially at the B2C level your KPIs remain strong and stable. Product and cost some of the level and how important is that narrative to tell to market and to tell to the investors like yes, this is a transition, but KPIs are strong.
P
Pontus Lindwall3:36
That's a very good question in the way that sometimes you may be a bit scared as an investor when you see profitability going down, but then again, you need to take temperature of the company and see is this healthy or not. Then when you see all these positive KPIs on the B2C side, then you realize that this would not be able to we wouldn't be able to achieve this if our product was not good, if we were making operational mistakes. So I think it's a very important statement to the investors that we are doing so well on the B2C side.
T
Ted Menmuir4:13
And in terms of that kind of margin squeeze at the moment, I mean, how are you countering that? Is this just a case of revising marketing or specific units? I mean, what's come to the kind of the forefront of these cost control measures?
P
Pontus Lindwall4:30
Yeah, there is obviously certain things you could do, but we have to remember here that what we see is a little bit of a drop down by one of our B2B customers, and we don't believe that we should try to fix that by taking down marketing for our core markets on the B2C side. That would show short term save us some money and have an impact on the profitability, but we're not here for only for this quarter, which we're in now, the second quarter. We're here for the long term, and we want to continue to build the company. So we believe that the strategy that we have is serving us well, and we're going to continue on that path with the existing strategy, and that means that we will continue to invest in some B2C markets, and we will continue to grow the company. Nothing of that has changed. If the company had a lot of extra costs that we didn't need, then of course this would be a perfect time to address that, but I think we are configured in quite a lean way, so we're going to crank on.
C
Charlie Horner5:49
Fantastic. I just wanted to reflect on some specific regions if we may. Latin America is of course a core part of Betsson's strategy now and revenue was 25% up that is and I think now accounts for about a third of group revenue. What are the big opportunities that you see across Latin America and I guess what has underpinned your winning strategy in that region?
P
Pontus Lindwall6:21
Yeah, the Latin American market is a little bit let's say behind Europe on the timeline of develop. That means that it's not as well penetrated yet by online gaming. So we believe that there's a strong structural growth in many of these markets going forward. Obviously we have good positions in a few of these markets. I think we're definitely number one in Argentina. We're well positioned in other markets as well. Good brand recognition. Technology which has been proven there for quite some time. So we are definitely optimistic about the future in that region.
C
Charlie Horner7:11
Mhm. And in Western Europe we talked about some of the macroeconomic headwinds that the industry faces and I would think that Western Europe is the poster boy of some of those challenges. But you've managed double-digit growth in Western Europe. I think Italy was a core part of that. Could you tell us about how you've sort of been impacted by some of those evolving regulations in Western Europe and how you've managed to grow in the region regardless of that?
P
Pontus Lindwall7:41
Yeah, again a very good question because Western Europe as a whole is actually a sad story in many ways where we have seen regulatory development which definitely is working against the ambitions of the regulators to create a regulated and taxable gaming industry. And we at Betsson being quite a big company, we are standing more or less outside many of the largest markets in Europe such as UK and Germany, two powerhouses of nations with a lot of gaming history, good economical foundations but we don't consider them investable as a company. So we leave them for someone else to invest in. Whereas in Italy, it's a different situation and some other markets as well. We see a better climate and there we can invest and keep on growing but Europe as a whole is very saturated and it's not a similar situation in most countries there.
T
Ted Menmuir8:56
As a CEO and looking at the overall kind of industry condition, I mean do you have any kind of timeline or confidence that you can return to having Betsson at all levels of market growth across its geographies or is that too far of a reach in 2026?
P
Pontus Lindwall9:17
Well, that's something that we obviously is hoping for and in many ways working for as well by trying to communicate to regulators and educate but you can see with all the efforts that went into the UK as an example to and still it went in the totally different direction, opposite direction. It's very sad.
C
Charlie Horner9:44
Mhm. And just one more region I wanted to ask you about Pontus was Central and Eastern Europe. Because that's perhaps the flip side of the story to LatAm and Western Europe. What headwinds are you seeing in that region?
P
Pontus Lindwall10:00
Actually, we are doing quite well in that region. Most of our if not all our B2C markets in that region are performing well, such as Greece and others. Then we had one B2B partner who has the bulk of their revenues in that territory that kind of has not been as successful and that has an impact. But overall, we are quite optimistic for that region as such as well.
C
Charlie Horner10:33
Okay. Let's look forward because in this quarter you've announced the 65 million euro acquisition of Rhino Entertainment. And you know, you're acquiring during a difficult period for the industry. But what are your plans for Canada? What's your kind of vision of that market? And it's a market that's proved kind of difficult for other competitors.
P
Pontus Lindwall10:58
It's a market which is very competitive. And such markets are always difficult for everyone, but obviously some companies succeed there. We have a business there. Rhino has a business there and they have, even they are maybe not one of the biggest operators there, have still succeeded in our view in the market. So I think putting those two together can give us a good position there.
C
Charlie Horner11:33
Mhm. And I guess looking again looking forward Pontus, all eyes will now be looking towards the World Cup. Obviously, that's going to be a huge part of 2026 trading for sports books globally. What preparations do you have in place now we're so close to the tournament to ensure that Betsson makes the most of those huge opportunities across your global portfolio of markets?
P
Pontus Lindwall12:01
Yeah, there's a lot of preparation we have on the marketing side of course certain initiatives in many different markets. Technology-wise we have made sure that our sports betting product is in a very good shape and obviously we will have some kind of development stop some time period before so that we don't implement new things that could carry a risk into the World Cup. So I think we are well prepared. The organization is on its toes really to take opportunity of this and it will be very interesting and also as we will know it's a totally new format with 50% more teams than the last tournament and it's going on for one week more than the last tournament so that gives us good opportunities to capitalize on the games.
C
Charlie Horner13:04
Mhm. It gives you an opportunity of course there's more games and more teams. Some have been concerned about competitive balance and how that might impact player engagement. Do you have any reflection on how that might work?
P
Pontus Lindwall13:19
Yeah, obviously when you add on some new teams that are ranked as not as good as some of the top teams, of course there will be some games initially in the tournament in the first phase that may be uneven on paper. And that is something that we are not used to in the same extent as this time, but we believe that by the second half of the tournament when it goes into knockout stages, it will be fun and interesting.
C
Charlie Horner13:58
Fantastic. And Ted, I'll just bring you back in again if you want to add anything more for Pontus.
T
Ted Menmuir14:03
Okay. You look, there's been like a real kind of pressure on these Q1s. And just from your leadership perspective, I mean, is it clear that this is a new era for iGaming?
P
Pontus Lindwall14:19
I don't see it as a new era, really. It's being in this industry for so long, there has always been challenges and headwinds and some markets shutting down and some other markets making stupid decisions. We're used to that and we have 25 licenses in regulated markets and that's quite a broad and diversified revenue stream, so I think we're in a good position going forward. And headwinds, if you can't take headwinds, then you shouldn't go into the gaming industry. That's how I see it. But then again, if you like challenges and to navigate them, then you're in the right spot.
C
Charlie Horner15:14
Very true indeed. And just the final question then Pontus, really, which is just how do you tell that story to investors and manage to get that confidence with your investor base just to say, this is a business that can navigate some of those challenges and headwinds that the industry is seeing, not just in Q1, but for the year and beyond?
P
Pontus Lindwall15:36
Yeah, I often refer to our history, which is quite long, and I say that if you look back, so many things has happened, and investors has been disappointed from time to time when things has happened, there's a cool down period in Netherlands and things like that. It came from nowhere. So you need to be prepared when you're investing in this industry. But on the other hand, we have performed really well over time, as well, and giving huge profits and dividends to the shareholders. So I think overall, our history has proven that we know how to handle it.
C
Charlie Horner16:19
Fantastic. Well, Pontus, look, we've really enjoyed having you on the show today. Really appreciate you taking the time. So, thank you ever so much for chatting to us. Learn how Optimove positionless marketing is changing how iGaming teams operate. Discover how operators are using Optimove positionless marketing platform to launch personalized CRM campaigns, dynamically change casino lobbies and bet slips, and create engaging game-ified experiences. Learn more at optimove.com. Well, Ted, that was a great conversation we had there with Pontus. I, for one, enjoyed it. How do you reflect on Betsson's performance in Q1 now that the CEO isn't in the room with us?
T
Ted Menmuir16:57
Thanks. Yeah, I mean, I think with Betsson, we got to kind of step back and also look at where this company has come from. And look, they've had some very good years outperforming the market. And I think since Pontus came back in 2018, they have been a peak performance. But again, it's just returning to the elements and you can't hide from them. This is I think quite he was quite right at pointing out that this is a time of a huge margin squeeze and cost pressures on the business and every part or every component is being rethought and Betsson cannot escape that reality.
C
Charlie Horner17:47
Yeah, for sure and I know Pontus sort of played it down a little bit, but I think it can't be discounted that there are huge macroeconomic challenges that the industry's facing. And to the point where he did say that actually there are some markets in Western Europe that are just uninvestable, which was an interesting line. I guess it follows on from multiple conversations we've had on the show, but now we're starting to see big global operators report for Q1. How do you sort of weigh up how some of these challenges are actually impacting the industry?
T
Ted Menmuir18:23
Okay, I kind of want to move away from the challenges because everyone knows what are the tax pressures and cost controls, fine. For me and my journalistic sense here is that I'm much more about the reactions and the relationships. And one of the things that the status of these companies and the two that caught the eye are Flutter and actually now Betsson because they're going from very strong growth profiles to okay, I wouldn't say they're stumbling now, but they are slowing down. And also investor sentiment here is that it's much more focused on the beat the bottom line and profitability. And I think that changes the relationship between the investor side and the realities of running an iGaming business. And I also think that there is frustrations there because you know how hard these guys are working just to maintain high financial growth, but to get that taken away by taxes and new cost pressures. It's very hard to just tell the market that these factors are bearing down on you.
C
Charlie Horner19:45
Yeah, for sure. And I think one other thing that might be touching on those cost pressures is the share of Betsson's revenue from locally regulated markets is now 73%. That's the highest it's ever been. Naturally, those markets might come with less profitability than those that aren't locally regulated. So I think that's also something that we should be bearing in mind when we're reporting on Betsson. And it's indicative of the way that the industry is going. There are more locally regulated markets now than there were 5, 10 years ago.
T
Ted Menmuir20:21
Yeah, but I think one of the things that Pontus said that was very true was that there's also a side to investing in this business and that it isn't just always going to be like you pitch up your money and the company's just going to go up. These are real terms of the time they're changing for the investor too. And they have to also have some stomach for understanding that there's going to be peaks and troughs to investing in any company, and especially in this period. You can't just expect quarter-on-quarter growth and your share price to just go up systematically. But I think it's also a case of having a sharper investment base in this industry.
C
Charlie Horner21:05
Fantastic. Well, Ted, I think that's probably a good place to leave it. Thanks for joining me for our little debrief on the Betsson interview. And thanks to our audience for tuning into today's episode of iGaming Daily. And join us throughout the week because it's SBC Summit Malta week, so we might have a few clips here and there from the guys on site.
T
Ted Menmuir21:28
This was the only shirt I could wear today. All right. You know what I'm saying? I don't
C
Charlie Horner21:34
All right. Thank you very much to everyone for listening, and we'll see you tomorrow on the next episode of iGaming Daily.