Where’s My Pickle? The LeoVegas Slider Continues

When Big Bill Hornbuckle, the boss of MGM Resorts International, flips open his cheeseburger today, checking on the status of that all-important relish, he’ll be hoping that–along with his newly-acquired LeoVegas iGaming group–he hasn’t been sold a pickle short.

For, with the recent release of their 2023 Q1, it’s become uncomfortably apparent that the slickly-named Scandi strutters–LeoVegas, stroke of naming genius–have been unable to stop the stagnation and slide of successive financial quarters.

The Swedish-origin, Malta-headquartered iGaming strivers, who sold out to MGM Resorts for US$607 million (£488m) last September, has registered a group-wide decline in revenues across all their key markets for the quarter ending March 31.

And this follows Q4 2022 when the online casino, sports betting and video slots and poker company, founded in 2011 by CEO Gustaf Hagman, recorded a precipitous 68 percent plunge in EBITDA.

This most recent quarter, the company reported sales of €95.03 million (£82.03m), a four percent decline compared to the €98.51 million (£85.04m) of a year ago.

Net Loss

Net loss, year-on-year, was €8.57 million (£7.39m), compared to €7.11 million (£6.13m). Negative EBITDA loss in Q1 grew to €3 million (£2.58m) from €2 million (£1.72m), year-on-year.

Gross profit over the quarter, consequently, dropped by 7.5 percent from €66.5 million (£57.4m) to €61.5 million (£53.09m) and operating profit plunged to a negative of €8.2 million (£7.07m), from a positive of €9.6 million (£8.3m) in Q1, 2022 — a fall of some 180 percent.

LeoVegas cited “enlarged transaction-related costs” and “provisions for incentive programmes” as the principal drivers for their decline in profitability.

Operating expenses in the quarter, for example, more than doubled to €270 million (£233.08).

Net Gaming Revenue in its home Scandinavian markets fell three percent, year-on-year; Germany–despite LeoVegas receiving a new iGaming licence–threw up its notoriously idiosyncratic regulatory challenges, and the company’s Rest of the World markets also reported a decline of 28 percent.

Nevertheless, LeoVegas has pushed ahead with its aggressive market-forward strategy by buying a majority stake in Push Gaming and launching its new Expekt sportsbook brand in Denmark in recent weeks.

Bill Hornbuckle, for one, will be expecting a whole lot more pickle from his new acquisition come the start of Summer.

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