Betsson Q1 2026 EBIT drops to €34M amid B2B decline and tax rise

Betsson AB has released preliminary figures for the first quarter of 2026, indicating a notable decline in profitability as the company continues to adapt its business model toward regulated markets. While the broader operational performance remains stable in several areas, the financial outcome reflects ongoing structural adjustments and external cost pressures.

The company expects total revenue for the quarter to reach €285 million, slightly below the €294 million reported during the same period in the previous year. More significantly, earnings before interest and taxes are projected to fall to €34 million from €64 million, highlighting a substantial contraction in operating profit.

According to the company, this shift is primarily linked to reduced contributions from its business-to-business segment, increased exposure to locally regulated markets and continued investments in expansion territories that are not yet generating profit.

Revenue mix changes weigh on margins

A closer look at the revenue composition reveals how evolving business priorities have affected overall margins. Casino operations remained the dominant revenue driver, generating €204 million compared to €212 million in the first quarter of 2025. Meanwhile sportsbook revenue held steady at €80 million, demonstrating consistent demand within that segment.

Other gaming products contributed a modest €1 million, reflecting a slight decline from €2 million in the prior year. Despite stable sportsbook revenue, the margin in that segment improved marginally to 8.4% from 8.0%, suggesting relatively favorable betting outcomes during the quarter.

However, the group’s gross margin declined significantly to 57.6% from 64.0%. This reduction is closely tied to a higher proportion of revenue originating from regulated markets, which typically involve higher taxation and compliance costs. In the first quarter of 2026, approximately 73% of Betsson’s total revenue came from regulated jurisdictions, compared to 59% a year earlier. This marks the highest level of regulated market exposure in the company’s history.

As a direct consequence, gaming taxes increased to €53 million from €45 million, placing additional pressure on profitability. While this development aligns with long-term regulatory strategy, it has created short-term financial headwinds.

Regional performance reflects shifting dynamics

From a geographic perspective, Betsson’s performance varied across key regions, reflecting both market maturity and strategic focus.

Central and Eastern Europe along with Central Asia, often referred to as CEECA, remained the largest revenue contributor. However, revenue from this region declined to €96 million from €122 million in the same quarter last year. This reduction may be attributed to changing market conditions and adjustments in business operations within the region.

In contrast, Latin America continued its upward trajectory, generating €93 million in revenue compared to €75 million previously. The region is increasingly becoming a core growth driver for Betsson, narrowing the gap with CEECA and demonstrating strong user engagement and market potential.

Western Europe also showed positive momentum, with revenue rising to €61 million from €56 million. Meanwhile, the Nordic markets experienced a decline, with revenue falling to €31 million from €38 million, indicating potential competitive pressures or market saturation.

Revenue from other parts of the world increased slightly to €4 million from €3 million, representing a relatively small but stable contribution to the overall business.

The company clarified that these regional figures are based on end-user residence and include both direct consumer revenue and licensing income from business partners.

B2B segment decline impacts overall results

One of the most significant factors affecting Betsson’s financial performance during the quarter was the decline in its B2B operations. Preliminary figures show that B2B license revenue dropped sharply to €51 million from €90 million in the first quarter of 2025.

This decline reduced the B2B share of total group revenue to approximately 18%, down from 31% in the previous year. The company attributed this decrease primarily to lower revenue from a single B2B customer, which had a substantial impact on overall results.

Despite this setback, Betsson indicated that activity levels from this customer have stabilized since early December, suggesting that the downward trend may have reached a plateau. The company also emphasized its intention to strengthen B2B operations over the longer term by expanding partnerships and enhancing service offerings.

CEO commentary highlights ongoing investments

Commenting on the preliminary results, Chief Executive Officer Pontus Lindwall provided insight into the company’s current strategic direction and financial outlook.

“Our B2C operations continue to perform well overall, with solid growth and a significant contribution to operating profit. At the same time, we are investing in several B2C markets that are not yet profitable, which is impacting total operating profit (EBIT) by approximately €10-15 million on a quarterly basis. We still believe these markets have the potential to become profitable, but we continuously monitor and evaluate their development and future prospects.

Our B2B operations, on the other hand, continue to be affected by lower revenues from one of our customers. Since the beginning of December, however, this B2B customer has seen a stabilization in average activity levels. In the longer term, I look forward to increasing our B2B revenues with both existing and new partners, while continuing to follow our strategy of creating shareholder value over time.”

The statement reflects a balanced view of current challenges and future opportunities, emphasizing disciplined investment and strategic patience.

Early Q2 performance shows positive momentum

Looking ahead, Betsson has reported encouraging signs in the early stages of the second quarter. Average daily revenue up to 8 April was approximately 9% higher than the average daily revenue recorded during the entire second quarter of 2025.

This improvement suggests a stronger start to the new quarter, potentially supported by favorable market conditions and operational adjustments implemented earlier in the year.

Additionally, the sportsbook margin at the beginning of Q2 2026 exceeded the rolling average of the previous eight quarters. This indicates supportive betting outcomes during the initial weeks, although the company acknowledged that sustained performance will depend on broader market trends and customer activity levels throughout the quarter.

Strategic focus on regulated markets continues

Betsson’s increasing focus on regulated markets remains a central pillar of its long-term strategy. While this approach introduces higher compliance costs and tax obligations, it also provides greater operational stability and reduces exposure to regulatory risks.

The transition toward regulated jurisdictions reflects broader industry trends, as operators seek to align with evolving legal frameworks and enhance transparency. For Betsson, this shift is expected to strengthen its market position over time, even if it temporarily affects profitability.

By prioritizing sustainable growth and compliance, the company aims to build a more resilient business model capable of navigating regulatory complexities across multiple regions.

Conclusion

Betsson’s preliminary first-quarter results for 2026 illustrate a period of transition rather than decline. While headline figures show reduced profitability, the underlying narrative points to a company actively reshaping its operations in response to changing market conditions and regulatory expectations.

The decline in EBIT and revenue can largely be attributed to external pressures such as increased taxation and internal strategic decisions, including investments in emerging markets and reduced reliance on specific B2B partners. At the same time, steady performance in B2C operations and growth in regions like Latin America highlight areas of resilience and opportunity.

Early indicators from the second quarter suggest that the company may be regaining momentum, supported by improved daily revenue and favorable sportsbook margins. However, the full extent of this recovery will depend on the continuation of these trends.

In a broader context, Betsson’s strategic emphasis on regulated markets represents a deliberate and forward-looking approach. While this transition carries short-term financial implications, it aligns with industry developments and positions the company for long-term stability.

As Betsson prepares to release its full quarterly report, stakeholders will be closely monitoring whether the early signs of improvement translate into sustained performance. For now, the company appears focused on balancing immediate challenges with long-term growth objectives in an increasingly regulated global gaming landscape.

FAQs

What was Betsson’s expected EBIT for Q1 2026?
Betsson expects preliminary EBIT of €34 million for the first quarter of 2026.

Why did Betsson’s profit decline in Q1 2026?
The decline was mainly due to lower B2B revenue higher gaming taxes and ongoing investments in new markets.

How did Betsson’s revenue perform in Q1 2026?
Revenue is expected to reach €285 million slightly below the €294 million recorded in Q1 2025.

Which segment contributed the most revenue?
Casino operations generated the highest revenue contributing €204 million.

What happened to Betsson’s B2B revenue?
B2B revenue declined significantly to €51 million from €90 million in the previous year.

Which region showed the strongest growth?
Latin America showed strong growth with revenue increasing to €93 million.

How did regulated markets impact Betsson?
A higher share of regulated market revenue increased compliance costs and gaming taxes.

What did the CEO say about the results?
The CEO highlighted strong B2C performance ongoing investments and stabilization in B2B activity.

How has Q2 2026 started for Betsson?
Early Q2 performance shows a 9% increase in average daily revenue compared to Q2 2025.

What is Betsson’s long term strategy?
The company is focusing on expanding in regulated markets to ensure sustainable growth.