Swedish state-owned gambling operator Svenska Spel has formed an international business unit.
Through Svenska Spel International, Sweden's leading gambling business--with turnover in Europe of 2.2 billion Euro--will focus on commercial cooperation with state controlled or regulated lotteries and gaming operators in Europe and later in other parts of the world.
The Swedish National Lottery, one of the biggest buyers of advertising in Sweden, announced in November 2004 that Svenska Spel was to reduce its costs for advertising in TV and on billboards by 20 percent, effective immediately. The cutback was necessary, according to the company's statement to the media, because "marketing for gaming and lotteries had increased so heavily over the last years that politicians, media and public bodies had reacted and asked for various kinds of restrictions or warnings."
"The reason for the huge number of commercials, billboards and ads promoting Lotto, scratch tickets and sports betting had partly been the tough competition between the big legal national gaming operators all offering huge jackpots for horse betting, draw games and TV shows and partly during the last years the aggressive marketing of private foreign Internet operators who have tried to open up the Scandinavian market in spite of legislation forbidding them to promote or sell their products in the Scandinavian jurisdictions," Jesper Kärrbrink, CEO of Svenska Spel, said.
In response, Svenska will try to earn more money for the Swedish state through the new international division.
"We will cooperate with WLA and EL members, who were officially not informed on this new business venture," explained Jan Stocklassa, who will head the new department. "Svenska Spel has a large portfolio of games, is strong in product development (and) technical platforms and has know-how which we can offer to other companies with licenses in regulated markets. The competition will be harder, and we have experience and expertise in marketing and in Internet and mobile gaming. For instance, we will come with a new scratch card (Triss) for Internet and for mobile gaming."
Stocklassa added, "Above that we have a very successful anti-addiction program. Even EL and WLA members do not have such a program.
Stocklassa also said Svenska wants to increase its partners' edge in the competitive marketplace. "Hopefully," he said, " we can also make some money doing so."
Despite its new international focus, Svenska is not preparing for a borderless European gambling market.
"We don't think that will happen," the Stocklassa explained. "I foresee only that there will be de-regulations of the regulated markets. In any case, the gaming business will be more international, and the competition will become stronger and stronger."
The Association of the European State Lotteries and the Toto Association are committed to several objectives. One of them is "raising money efficiently for public benefit," and Stocklassa this won't change.
"All partners that we work with will have to have the same objective," Stocklassa said, "as well as applying in a program against problem gambling.
Stocklassa, who previously worked with MTG AB, Metro AB and the Swedish Trade Council. Stocklassa will be assisted at Svenska Spel International by Monica Medvall, a 20-year veteran of the Swedish lottery and gaming business, and Göran Wessberg, who worked for many year with international contacts at Svenska Spel before retiring in January '05.
Profiling Svenska Spel
Svenska Spel conducts business through its parent company, AB Svenska Spel, and its subsidiaries, Casino Cosmopol AB, CC Casino Restaurang AB and Svenska Spel fastighets AB. Svenska Spel is wholly owned by the Swedish state, and all of its revenues go to its owners.
The company's portfolio features numerous sports betting, lottery and scratch-ticket products. The company has also offered slot machines under the "Jack and Miss Vegas" brand since 1997.
Svenska Spel introduced the first international casino in Sweden in the city of Sundsvall in June 2001 and has since opened casinos in Malmö, Göteborg and Stockholm. The group's Casino Cosmopol subsidiary is responsible for operating casinos.
Svenska Spel had another record year in 2004, with gross sales of 20.2 billion SEK (2.2 billion euro)--an increase of 3.5 percent over the previous year. The preliminary revenue for 2004 was 4.8 billion SEK (530 million euro)--an increase of 2. percent over the previous year. The company attributes the increases to growth in its casino and Internet gaming divisions.
Internet sales were up from 495 SEK (54.6 million euro) in 2003 to 777 million SEK (85 million euro) in 2004--an increase of 56.8 percent. Traditional retailing was down by 0.8 percent.