Internet casino group LeoVegas has published their third quarter financial results, revealing higher revenues, but warning that regulatory compliance costs are rising.
Key financial indicators for the quarter ending September 30th, 2018 were:
- Revenues of €78.6 million, up 41% from last year
- Earnings of €9 million, up from €1.4 million last year
- Organic growth of 7%
- Regulated market revenues made up 35.3% of the company's total, but will grow to roughly 60% when Sweden regulates next year
The big news from the release was the revelation that costs in regulated markets related to compliance are going up. The tougher compliance standards are stalling growth in markets such as the UK, which has been tightening rules on marketing offers to punters. The revelation led to LeoVegas shares free falling by 24% at the time of release.
Commenting on the results LeoVegas CEO Gustaf Hagman said, "The third quarter was a quarter of transition for LeoVegas as a Group, during which we have focused on compliance measures, completion of platform development projects and other long-term investments to enable the next major steps in the Company's development. The work on meeting compliance requirements in the best way possible has been necessary and will give us a major competitive advantage. We are now at the forefront in this area, ensuring long-term sustainable and profitable growth for the Group.
"Despite the important improvement efforts, we are not satisfied with our growth or profitability during the third quarter. Our work with compliance has mainly affected our near-term growth in our two largest markets, the UK and Sweden. As a consequence of this shift we saw a drop in the average player value, which we have not been able to mitigate in the short term by a new record number of depositing customers during the quarter."