GiG Blames New Swedish Rules for Revenue Decline in Q1

Representatives from Malta-based Gaming Innovation Group (GiG) have recently commented that they believe the drop in revenue during Q1 happened mainly because of new regulations in the Swedish market.

The company’s revenue during the first three months of 2019 came up to €32.4 million…

…while the revenue during the same period last year came up to €37.3 million.

More Details on GiG Revenue

B2C segment had a huge slip from €25.4 million to €20.2 million, which probably happened due to new and stricter rules in the newly-regulated Swedish market that officially opened on January 1 of this year.

GiG officials, however, believe that the Swedish market will calm down and that the company’s revenue will improve in the second half of the year.

B2B segment revenue dropped from €15.3 million to €14.2 million, so the company mentioned that the main reason for it is the increased pressure on operators in the Swedish market.

GiG, who recently signed a content agreement with iSoftBet, was able to compensate its revenue loss by cutting costs across various areas. Marketing expenses were down from €11.9 to €8.6 million because of lower marketing activities in Sweden.

Other operating expenses were also down from €14.3 million to €13.3million…

…but lower spending did not stop the company from having a lower gross profit in Q1, with €26.0 million down 14.8% year-on-year.

This happened thanks to the 18% gross revenue tax levied on Swedish licensees from January 1.

A Word on Performance

Robin Reed, CEO of Gaming Innovation Group, said that he was satisfied with the company’s performance during the first quarter of this year.

According to him, it was the first time the company had to face regulatory changes in one of its most important markets. But luckily, it is expected that Swedish regulators will decrease the number of changes by the end of the year.

“We believe Sweden will stabilise over the course of the year and are looking forward to compete for market shares,” Robin Reed commented.

“Regulated markets are key to secure long term sustainability for the business and in addition to Sweden we will launch Spain in Q3-19 and start marketing there in Q4-19,” he added.

Plans for the Future

Reed also mentioned in his official report that GiG plans to keep on investing in a new content…

…while also expanding the range of games available to its clients.

He said that investing in the future of the company, along with the current solutions and content, would be the crown of four important years that it went through.

“Once complete, it will yield us lower cost, increased development velocity and innovation, and allow us to greatly accelerate sales and market launches whilst we will aim to migrate the entire current business over throughout 2020,” Reed said.

“Q1 was a tough quarter for the industry and for us, but we delivered in a challenging environment. Going into Q2, I believe we have navigated through the storm and are in good shape with plenty of opportunities,” he concluded.

Source:

“GiG blames Swedish regulation as revenue dips in Q1”, igamingbusiness.com, May 7, 2019.