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LeoVegas launches GoGoCasino – with eye to take market shares in growing target group

George Miller

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GoGoCasino launched in Finland
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LeoVegas is launching GoGoCasino as the first brand on its proprietary multibrand platform. GoGoCasino complements and diversifies the Group’s brand portfolio, which is operated under the collective name “Brands of Leo”.

“Shortly after going live with our multibrand portfolio we are now launching GoGoCasino. The brand has a modern and fun tone that conveys a smooth experience and fills a hole in the market,” comments Gustaf Hagman, LeoVegas’ Group CEO. “For customers who value simplicity and speed, GoGoCasino sets an entirely new standard for the industry. The start and response from customers have been very positive and we are capitalising on the Group’s strengths, experience and economies of scale. GoGoCasino is initially being launched in Sweden, but will go live in more markets soon.”

GoGoCasino – First brand to be launched on the Group’s multibrand platform
GoGoCasino combines the best functions in casino with a high level of user friendliness and alluring design. The brand features an inventive and innovative product that offers one of the industry’s smoothest gaming experiences. Try it here: GoGoCasino.com.

GoGoCasino has been developed by a small team that has used existing resources within the Group, all in line with LeoVegas’ plan to increase efficiency in the Company with existing resources. The aim of the proprietary multibrand platform is to launch more customised brands.

The multibrand strategy and Brands of Leo are part of the Company’s expansion strategy and will contribute to the achievement of the financial targets for 2021 of EUR 600 m in revenue and EUR 100 m in EBITDA.

 

 

About the LeoVegas mobile gaming group
LeoVegas’ passion is “Leading the way into the mobile future”. LeoVegas is the premier GameTech company and is at the forefront of using state-of-the-art technology for mobile gaming. A large part of this success can be credited to an extreme product and technology focus coupled with effective and data-driven marketing. Technology development is conducted in Sweden, while operations are based in Malta. LeoVegas offers casino, live casino and sports betting, and operates two global and scalable brands – LeoVegas and Royal Panda – as well as a number of local brands in the UK. The company’s shares are listed on Nasdaq Stockholm. For more about LeoVegas, visit www.leovegasgroup.com. 

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Several markets remove covid-19 restrictions – Sweden are doing the opposite

George Miller

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Several markets remove covid-19 restrictions - Sweden are doing the opposite
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Authorities in Spain and the UK are now choosing to remove the temporary covid-19 restrictions. The restrictions on these markets were introduced two months ago and were linked to the marketing of games. In Sweden, new restrictions are now being introduced instead.

“These are examples of two regulated markets where authorities and players in the gaming market work together to achieve a sustainable and healthy gaming market in the long term. The fact that both Spain and the UK now return to the normal regulatory framework is in line with how the outside world relieves previous restrictions in connection with covid-19. We now also see that many sports competitions are resumed, and the football leagues start again,” says Gustaf Hagman, Group CEO.

“Unfortunately, despite criticism from several directions, Sweden is moving in the opposite direction and facing temporary restrictions. There is a great risk that this will erode Swedish regulation even more. Copenhagen School of Economics has carried out an independent report which indicates that the black market can amount to as much as 50 percent when introduced. It is far from the authorities’ goal that wants to limit the black market to 10 percent“, Gustaf Hagman, Group CEO continues.

Spain
Spain has for a time introduced a temporary marketing ban on gambling.

UK
For a period of six weeks, the largest gaming companies in the UK (those that are BGC (The Betting and Gaming Council) members) have voluntarily opted to restrict advertising on TV and radio to only feature a safer gambling message rather than promote their products. Advertising restrictions are now being lifted, however there is still a voluntary agreement for operators to dedicate a minimum of 20 percent of their advertising on TV and radio to safer gambling throughout the period up to and including 31 August 2020.

Sweden into temporary restrictions
As of July 2, Sweden will impose temporary restrictions on, among other things, online casinos that extend until the turn of the year 2020. The restrictions include a deposit limit of SEK 5,000 per week and licensees, and only one bonus, in the form of a welcome bonus, which may amount to a maximum of SEK 100.

Responsible Gaming
Regardless of the world situation and business cycle, LeoVegas puts its customers’ safety first. LeoVegas works with several customer tools that are used in the form of setting deposit and loss limits. The company actively helps customers with this and continuously informs them about playing responsibly. In a digital world, everything is measurable and LeoVegas works proactively, using algorithms, to detect trends in unhealthy behaviour at an early stage – before gambling becomes a problem. During the covid-19 period, LeoVegas see no tendencies for problem gambling to increase.

“The Swedish Gambling Authority notes that Spelberoendegruppen (the Gaming Addiction Group) has not noticed any change in the number of contacts and the Spelberoendes förening (the Gaming Addict’s Association) notes an increase in people who state trot as a source of problem gambling,” concludes Gustaf Hagman.

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LeoVegas Press Releases

LeoVegas AB Q1: Quarterly report 1 January – 31 March 2020

George Miller

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LeoVegas AB Q1: Quarterly report 1 January – 31 March 2020
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“LeoVegas advocates for a sustainable gaming industry, responsible gaming and positive social development” – Gustaf Hagman, Group CEO

FIRST QUARTER 2020: 1 JANUARY–31 MARCH

  • Revenue increased by 4% to EUR 89.4 m (86.3).
  • EBITDA was EUR 9.0 m (7.2), corresponding to an EBITDA margin of 10.0% (8.3%).
  • The number of depositing customers was 413,269 (388,747), an increase of 6%.
  • The number of returning depositing customers was record-high 219,841 (200,040), an increase of 10%.
  • Earnings per share were EUR 0.02 (0.00) before and after dilution.

EVENTS DURING THE QUARTER

  • LeoVegas’ Chairman, Mårten Forste, hired as new Chief Operating Officer (COO) in Malta.
  • The Nomination Committee presented its proposal for a new board.
  • The Board of Directors proposed a dividend of SEK 1.40 per share, to be paid on two occasions during the year.
  • LeoVegas reached an agreement with the sellers of Royal Panda on the earn-out payment for the acquisition.
  • Following the COVID-19 outbreak, operations are continuing without significant disruptions. LeoVegas’ employees are working from home, and a travel ban has been issued for employees.

EVENTS AFTER THE END OF THE QUARTER

  • Preliminary revenue in April amounted to EUR 37.6 m (30.5), representing growth of 23%. Growth was positively affected in markets where LeoVegas has carried out product improvements and in markets where the land-based gambling industry is currently shut down. At the same time, the dramatic decrease in sporting events had a negative impact on growth in April.
  • The assessment is that thus far COVID-19 has had a neutral to slightly negative revenue impact for LeoVegas on the Swedish market. Moreover, the assessment is that international revenues have increased somewhat relating to market shares moving from land-based to online gaming.
  • LeoVegas completed the migration of 12 brands in the UK to its proprietary technical platform.
  • The LiveCasino.com brand was launched on 4 May 2020.
  • LeoVegas’ 2019 Annual Report published on www.leovegasgroup.com.
  • LeoVegas has summoned its Annual General Meeting to be held on 8 May 2020. Shareholders who are ill are urged to not attend but can vote via proxy.

 

COMMENT FROM GUSTAF HAGMAN – GROUP CEO

OPERATIONS AND COVID-19
The effects of the COVID-19 crisis are hard to assess, and the conditions are changing constantly. As an entrepreneur I have great empathy for other businesses that have been forced to fight for their survival. For us, the health of our employees and their families is of utmost importance right now. I am incredibly proud of how our employees have handled this difficult situation, which has required that we conduct our operations without significant disruptions even though most of our offices have been closed since mid-March.

The ongoing crisis has had a minor impact on online-based businesses. Gaming online is part of the entertainment industry, and when people can no longer go to cinemas, restaurants and similar, more of their leisure budget can be spent on other entertainment, such as gaming. For LeoVegas, cancelled and postponed sporting events have resulted in a sharp drop in revenue from sports betting, which accounted for 9% of revenue before the crisis. At the same time, LeoVegas has likely taken market shares in casino mainly from the land-based industry as well as from competitors that are more sports book oriented. Our assessment is that the COVID-19 crisis thus far has had a neutral to slightly negative impact on the Group’s Swedish revenues. Moreover, the assessment is that international revenues have increased somewhat relating to market shares moving from land-based to online gaming. At the same time, we are cognizant of the risk for a global recession, during which people’s leisure budgets would likely decrease, in turn affecting the company.

Regardless of the situation in our external operating environment or the economy, we put our customers’ safety first. We are sympathetic to concerns about the risk for problem gaming during the current crisis. We have customer tools that can be used to set deposit and loss limits, for example, and we are actively helping and informing our customers about how to play responsibly. In a digital world, everything is measurable, and we are working proactively with the help of our algorithms to detect tendencies for unsound behaviour at an early stage. This allows us to act before a customer’s gaming becomes a problem. In addition, we are exercising extra restraint in our advertising. Thus far we have not seen signs from our data that problem gaming among our established and new customers has risen, and we are paying great attention at the individual level to ensure that this remains the case.

We therefore feel it is unfortunate that the Swedish government on weak grounds recently proposed a number of new, temporary restrictions in the Swedish market, including new deposit limits. If the proposal goes through, the new limits will undermine the existing legislation and drive the most vulnerable players to the black market, where there is no consumer protection. According to the independent research consultancy Copenhagen Economics, channelisation in Sweden today is only approximately 75% for online casino, compared with the Swedish government’s goal of above 90%, and the trend is declining. Our hope is that the government and authorities focus their work instead on improving channelisation, so that we and other licensed operators can contribute to high consumer protection and help reduce problem gaming. Otherwise there is a risk that the state will once again lose control over the Swedish gaming market.

SUSTAINABILITY TARGETS
LeoVegas has decided to set clear ambitions, targets and measures for sustainability based on Environmental, Social and Governance factors. We have done this to show in a transparent, clear and concrete way what LeoVegas aims to achieve in building a sustainable company and advocating for a sound gaming industry. Today approximately 10% of the Group’s employees work in specific roles in compliance and responsible gaming.

FIRST QUARTER 2020
Revenue during the first quarter amounted to EUR 89.4 m (86.3), representing organic growth of 4%. EBITDA was EUR 9.0 m (7.2), corresponding to an EBITDA margin of 10.0% (8.3%). Unfavourable currency movements resulting from turbulence in our operating environment had a negative earnings impact of EUR 1.4 m. Our operating profit grew 24% compared with the same period a year ago despite negative currency effects and a high level of investment, which confirms that our focus on operational efficiency and cost control is generating the desired results.

TECHNOLOGY
At the end of the quarter we completed the platform migration of 12 brands in the UK. Now all of LeoVegas’ brands in the UK are run on the Group’s proprietary technical platform. The migration has contributed to an improved customer experience through a dramatically expanded game offering, payment opportunities, faster functionality and loading times, and significantly reduced complexity in the daily activities. Owning and controlling our own technology is a major competitive advantage that eliminates complexity, offers faster speed, and provides necessary control and flexibility in the face of the rapidly changing demands for compliance. Our proprietary technology also enables a scalable multibrand strategy, where we launched LiveCasino.com in a number of English-speaking countries in the second quarter.

MARKETS
We have a solid performance with profitable growth in most of our markets. Above all, we are proud that we succeeded at attracting a record-large depositing customer base during the quarter, with sequential growth of 11% versus Q4.

We are now beginning to see a clear effect of the measures we have taken in the UK, and the remaining brands grew in total compared with both the same period a year ago and with the fourth quarter. With all brands now operating on the same platform, we have created a good position to grow in the UK.

Germany continues to grow and is nearly back to the same levels as in September last year, when we were negatively affected by the decision by a key payment services provider to put restrictions on gaming payments. After many years, the German federal states have now agreed to regulate the online gaming market at the national level at the end of 2021. This is a positive development and something that we have long looked forward to. However, there are certain elements and restrictions in the draft regulation that may have a negative impact on the attractiveness for the players and on the player value. Over time this may be compensated by lower competition and greater access to payment options and marketing channels. We are waiting with confidence for all of the details surrounding future regulation in the market and hope that Germany draws from the experiences of other regulated markets to ensure successful regulation with a high level of channelisation. On the whole, the Nordics region had a slightly weaker quarter, which was partly affected by a decrease in sports betting activity at the end of the period and greater restrictions on bonus and deposit limits in the Danish market. In Sweden we continued to gain market share during the quarter. Following the successes in Sweden, a launch of the GoGoCasino brand is planned for the Finnish market during the second quarter.

COMMENTS ON SECOND QUARTER 2020
Revenue for the month of April amounted to EUR37.6 m (30.5), representing annualised growth of 23%. LeoVegas’ favourable performance in April was driven by the successful migration in the UK, a number of improvements in the payment flow in a number of markets, and by a record-large customer base at the start of the period. Moreover, LeoVegas’ assessment is that the company has taken market shares from the land-based gambling industry, mainly in markets where the land-based industry has been totally shut down due to the COVID-19 crisis, as well as from competitors with primary focus on sports betting. Sweden, which has been in the spotlight recently, generated flat revenue growth in April versus the first quarter average monthly revenue and has thus not been a driver of growth at the beginning of the second quarter. At the same time, the assessment is that the total gaming market in Europe has contracted as a result of the ongoing COVID-19 crisis.

It is hard to predict the long-term effects for LeoVegas, but the longer the crisis continues, the greater the risk is that revenue will be negatively impacted by consumers’ reduced purchasing power. At the same time, an accelerated structural shift is expected from land-based to online gaming, which makes LeoVegas well-positioned for the future.

Finally, I would also like to thank my co-founder Robin Ramm-Ericson, who has declined re-election to the Board of Directors, for his superb work and partnership in building LeoVegas.

PRESENTATION OF THE REPORT – TODAY AT 09:00 CET

  • To participate in the conference call, and thereby be able to ask questions, please call one of the following numbers: SE: +46 (0) 8 50 69 21 80, UK: +44 (0) 20 71 92 80 00, US: +1 63 15 10 74 95, Confirmation code: 7696603 or join at the web https://edge.media-server.com/mmc/p/7q4fhisi

This information is information that LeoVegas AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation 596/2014. The information was submitted for publication, through the agency of the contact person set out below, at 08:00 CET on 6 May 2020.

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Industry News

Pragmatic Play And LeoVegas Announce Highly Awaited Bingo Deal

George Miller

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Pragmatic Play And LeoVegas Announce Highly Awaited Bingo Deal
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Pragmatic Play and LeoVegas have announced a ground-breaking deal which sees the award-winning casino launch top bingo games from one of the industry’s leading content providers.

Existing players on LeoVegas brands such as LeoVegas UK, Crown Bingo, Pink Casino and Legs Eleven will now have access to one of the most innovative and multi-featured bingo products on the market, offering highly competitive daily jackpots and prizes.

This deal strengthens Pragmatic Play’s strategy to offer a full suite of cutting-edge iGaming products to a wider audience.

Claire McDaid, Vice President of Bingo at Pragmatic Play said: ‘I am thrilled and thoroughly looking forward to working with the LeoVegas team on both their existing bingo brands and their new launches.”

“The Pragmatic Play bingo team have worked vigorously to ensure we have a stand-out product across UX, UI and Back Office features which I am confident will enable LeoVegas and the Rocket X managed brands to drive their bingo business forward.

A spokesperson at LeoVegas said: “We are delighted to further enhance our agreement with Pragmatic Play and take their revolutionary bingo offering.

“We have a close relationship with the supplier already, taking both slot titles and Live Casino products, so it was the next logical step to take another vertical from them, considering how well their products have performed in our portfolio.”

The provider’s Bingo product offers a market-leading number of variants including 90, 80,75,50 and 30 ball bingo. At ICE 2020, the supplier created much excitement with the launch of a unique mobile-first bingo game, ensuring partners have innovative and exciting content to attract and retain both bingo and softer gaming customers in an ever-increasing competitive marketplace.

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