Svenska Spel, the operator of Casino Cosmopol in Sweden, has announced plans to permanently close its venues in Gothenburg and Malmö due to limited profitability. The decision comes as a result of declining visitor numbers in recent years, primarily due to the rise of online casinos.
The closures will leave only one remaining land-based casino in Sweden, the Casino Cosmopol in Stockholm. This move could potentially impact around 200 jobs, leading to emotional challenges for many employees, according to Ola Enquist, the chief executive of Casino Cosmopol.
The decision to close the venues follows a tough financial period for Casino Cosmopol, with a recent fine of SEK2m for anti-money laundering failings. Additionally, the company’s Q3 report showed revenue and earnings stalling due to market-wide pressures on the retail sector. The net gaming revenue at Casino Cosmopol and Vegas decreased by 11% to SEK247m, with a loss of SEK35m.
The impact of a new tax hike on gambling in Sweden has also contributed to the financial challenges facing operators. The government plans to raise the gambling tax rate from 18% to 22% of gross gaming revenue, which has been met with strong opposition from the industry.
In a separate development, La Française des Jeux (FDJ) has made an offer to acquire the entire outstanding share capital of Kindred Group for SEK27.96bn. Kindred has recommended shareholders accept the offer, which is 24.4% higher than the current price of Kindred shares.
FDJ believes the acquisition would create the second largest operator in Europe’s gaming industry, resulting in a “European gaming champion” with enhanced revenue and earnings growth.
Overall, these developments in the Swedish gambling industry reflect the challenges faced by land-based casinos, and the impact of regulatory and market changes on operators’ financial performance.