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Betsson Reports Record Q3 2026 Revenue but Profit Margins Decline

Betsson Achieves Record Q3 Revenue – Higher Taxes and B2B Declines Reduce Profit Margins

Key Takeaways

• Group revenue reached a record €326.5 million ($365.7 million), representing a 10% increase year-on-year.
• EBITDA declined 23% to €63.4 million ($71 million) as the profit margin narrowed to 19.4%.
• Locally regulated markets now account for 77.7% of total revenue, driving a steep increase in betting duties.
• Active customer numbers surged 40% to 1.87 million, supported by the 2026 FIFA World Cup.

Regulatory Shifts and Taxes Reduce Third-Quarter Earnings

Betsson AB reported a mixed financial performance for the third quarter of 2026, balancing top-line growth with shrinking profitability. Group revenue increased 10% year-on-year to reach €326.5 million ($365.7 million). Organic growth contributed 8% to this record-breaking quarterly revenue figure. The company saw a steep 23% decline in EBITDA, which fell from €82.5 million to €63.4 million ($71 million).

This drop caused the EBITDA margin to narrow significantly, dropping from 27.9% to 19.4%. Operating income experienced a similar downward trajectory, declining 31% to €46.1 million ($51.6 million). Gross profit also decreased by 5% to settle at €181.1 million ($202.8 million).

Higher gaming taxes are a primary driver behind the squeezed profit margins. The operator reported that locally regulated markets generated 77.7% of total revenue during the quarter, a substantial increase from 63.8% a year earlier. This shift toward regulated jurisdictions caused betting duties to surge from €41.4 million to €69.4 million ($77.7 million). Operating expenses rose from €122.9 million to €135 million ($151.2 million) during the same period.

B2B Revenue Drops While B2C Segments Expand

Chief Financial Officer Martin Öhman outlined a divergence in performance between the company’s business-to-business and business-to-consumer divisions. B2B revenue fell by 39%, amounting to a reduction of approximately €30 million ($33.6 million). Reduced activity from a single, unnamed major client caused the bulk of this contraction.

The B2C segment provided a counterbalance by growing 28% year-on-year. The shift toward direct consumer revenue combined with the surge in local gaming taxes created a mixed financial effect. The gross profit margin contracted from 64% to 56% as direct gaming taxes absorbed a larger share of the income.

Customer engagement metrics showed strong positive momentum across the consumer facing brands. Active customers increased by 40% to hit a record high of 1.87 million. The 2026 FIFA World Cup and the beginning of major domestic football seasons served as primary catalysts for this influx of active users.

Latin America Drives Regional Growth Alongside Strategic Acquisitions

Geographical performance varied heavily, with Latin America emerging as the strongest growth engine for the operator. Revenue in the region increased by 51.8% to reach €116.1 million ($130 million). Latin America now represents 36% of the total group revenue. Markets in Argentina, Peru, and Colombia led this expansion, while the company maintained its established market positions in Chile.

Western European markets delivered positive results, showing a 13.8% revenue increase to €64.8 million ($72.6 million). Italian casino operations provided the main support for growth in this region. Other traditional markets faced headwinds, with Nordic revenue falling 10% to €32.7 million ($36.6 million). The Central and Eastern Europe and Central Asia region recorded a 16.8% decline, generating €99.2 million ($111.1 million).

The Rest of the World category saw revenue surge by 106% to €13.7 million ($15.3 million). This spike followed the strategic expansion into Alberta and Ontario, facilitated by the €64.5 million ($72.2 million) acquisition of Rhino Entertainment in August. The operator secured a €75 million ($84 million) revolving credit facility in July and rebranded the betFIRST property in Belgium.

Casino Operations Outpace Sportsbook Performance

Casino products remained the dominant revenue source for the group during the third quarter. Casino revenue grew by 13.7% to total €253.5 million ($283.9 million). This product segment now accounts for 77% of the total group revenue.

Sportsbook performance showed only minimal growth, with revenue increasing by just 0.8% to €71.8 million ($80.4 million). The sports betting vertical represents 22% of the group total. Margins after free bets dropped from 8.8% to 8.1%, restraining the overall revenue contribution from this segment despite the high volume of active customers during the World Cup period.

Looking at regulatory challenges, CEO Pontus Lindwall addressed the recent gambling ban in Brazil. He noted that limited marketing expenditure in the country reduced the company’s financial exposure compared to competitors. Management expects future regulatory frameworks in Brazil to evolve, potentially opening new structured avenues for operators. Current fourth-quarter trading through October 18 indicates average daily revenue running 11% above the previous year’s average, pushing shares up to SEK 96 following the earnings release.

Our Assessment

Betsson’s third-quarter results highlight the direct financial impact of transitioning into locally regulated markets. Achieving record revenue while absorbing a sharp decline in EBITDA illustrates the high cost of compliance and the heavy burden of local gaming taxes. The loss of significant B2B revenue exposes the vulnerability of relying on major single-client contracts, forcing the B2C segment to carry the growth burden. The aggressive expansion in Latin America and strategic entries into North American markets demonstrate a clear geographic diversification strategy. While sports betting margins face pressure, the consistent double-digit growth in casino operations provides a stable financial anchor as the operator navigates a tightening global regulatory landscape.