The trend of growing online gaming revenues for Scandinavian-facing operators was very much confirmed late this week when newly-listed LeoVegas showed third-quarter revenues growing organically by 76%.
The company said revenues soared to €37.9m and that total deposits grew 87% to €123.7m. The increase in player numbers was in line with the revenue uplift, up 77% to nearly 156,500; new depositing customer also rose 76% to over 74,500.
The rising revenues also fed through to EBITDA which clocked in at €9.8m compared with €1.1m in the third quarter last year. The profit number was helped by a paring back of marketing expenses as a percentage of revenues. In the second quarter this ratio hit a barely sustainable 60% to a still toppish 36%, still above the industry average.
The second quarter advertising and promotional splurge came with the launch of the LeoVegas sportsbook and its new live casino offering. The company said the blended market rate from the second and third quarters of 48% was closer to the LeoVegas long-term average rate of 50%.
The company gave no information about revenues from the sportsbook.
“Our marketing investments steer profitability, which will continue to be volatile from quarter to quarter,” warned chief executive Gustaf Hagman. “However, with respect to accumulated earnings and the EBITDA margin during the first nine months of the year, profitability, at 11.3%, has developed well toward our long-term target of approximately 15% in 2018.”
The company said the Nordic region and the UK accounted for 71% of net gaming revenue, down slightly from 75% in the second quarter. The company said it had received a licence to operate in Denmark in early October and would be launching there soon.
The company said the fourth quarter had started well with net gaming revenue in October up 63% to €12.8m over the same period last year. The company said December was historically the month with the strongest growth rate in the quarter.
“With strong momentum, new gaming categories and a leading position in mobile gaming, we look forward to an eventful winter,” said Hagman.
The company was listed on the Nasdaq First North Premier exchange in Stockholm in March.
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