Svenska Spel to Close Casino Cosmopol Venues in Gothenburg and Malmö

Svenska Spel, the renowned Swedish casino operator, has decided to shut down two of its Casino Cosmopol locations in Gothenburg and Malmö due to financial challenges. The primary reason behind this drastic move is the notable decrease in visitor numbers, a trend directly linked to the rise of online casinos. The closure of these venues is aimed at minimizing losses, and a final decision will follow union negotiations.

Following the closures in Gothenburg and Malmö, the only remaining land-based Casino Cosmopol in Sweden will be located in Stockholm. This transition is expected to affect around 200 jobs, leaving many employees facing uncertain futures. Ola Enquist, the CEO of Casino Cosmopol, expressed the difficulty of this decision and noted that despite various efforts to increase revenue and cut costs, the measures implemented were insufficient to sustain the venues.

This decision comes on the heels of a SEK2 million fine issued to Casino Cosmopol in December for anti-money laundering (AML) violations, further exacerbating their financial woes. A quarterly report by Svenska Spel revealed revenue and earnings stagnation due to competitive pressures from online gaming and restaurant casinos, resulting in a 11% drop in net gaming revenue for Casino Cosmopol and Vegas areas. These challenges prompted a shift in business practices, including revised opening hours, but failed to reverse the losses.

In September, the Swedish government proposed a gambling tax rate increase from 18% to 22% of gross gaming revenue (GGR), scheduled for July 1, 2024. This move, expected to generate an additional SEK540 million in tax revenue annually, has been met with strong industry opposition. Hasse Lord Skarplöth, CEO of Aktiebolaget Trav och Galopp (ATG), called for a differentiated tax structure, with sports betting retaining an 18% rate while online casinos face an increase.

In unrelated news, La Française des Jeux (FDJ) has made a SEK27.96 billion offer to acquire the entire outstanding share capital of Kindred Group. The offer, 24.4% higher than Kindred's closing share price in January, has received a unanimous recommendation from Kindred's board. If successful, this acquisition would create the second-largest operator in Europe's gaming industry, positioning it as a "European gaming champion" with enhanced revenue and earnings growth prospects.