Struggling Profits Lead to Major Closures
The once-thriving Casino Cosmopol in Gothenburg and Malmö are set to close their doors for good, as dwindling profits force the hand of operator Svenska Spel. A surge in online casino popularity has led to a significant drop in visitors, rendering the venues unsustainable. With these closures, Stockholm’s casino stands alone as the remaining land-based gambling haven in Sweden.
Emotional Impact and Job Concerns
Ola Enquist, the head honcho at Casino Cosmopol, didn’t hide the emotional weight of the decision, especially with around 200 jobs on the line. Despite aggressive strategies to cut costs and boost income, the anticipated turnaround has remained out of reach, leaving the company with few options but to shut down operations in these two cities.
Regulatory Fines Add to Financial Woes
The casino’s troubles were further aggravated by a hefty SEK2 million fine for slipping up on anti-money laundering protocols. The Swedish watchdog Spelinspektionen unearthed gaps in the casino’s practices, putting additional financial strain on Svenska Spel and its Casino Cosmopol brand.
Revenue Stagnation Hits Hard
The grim news of revenue and earnings stagnation was spotlighted in Svenska Spel’s Q3 report, with an 11% plunge in net gaming revenue for the Casino Cosmopol and Vegas divisions. The competitive heat from online gaming and restaurant casinos has been unrelenting, culminating in a SEK35 million loss.
Efforts to Stay Afloat Fall Short
In a bid to stay competitive, Svenska Spel adjusted opening times and rolled out other changes to no avail. The relentless losses have left the company with no choice but to proceed with the closures of their Gothenburg and Malmö locations.
Potential Tax Hike Spells Further Trouble
The Swedish government’s plan to hike the gambling tax from 18% to a steeper 22% is sending shockwaves through the industry, with a projected SEK540 million annual boost to state coffers. The proposed increase, set to kick in from July 1, 2024, has been met with fierce opposition from gaming operators.
Calls for Tax Fairness in the Industry
Hasse Lord Skarplöth of ATG isn’t shy about pushing back, suggesting a tiered tax system instead of a blanket hike. He’s advocating for sports betting to stick to the current 18% rate, while online casinos could shoulder a higher tax, aiming for a more equitable solution across the board.