Svenska Spel, the Swedish state-owned gambling operator, has announced its decision to permanently close the Casino Cosmopol facilities in Malmö and Gothenburg. The main reason for this move is the limited profitability of these establishments, which has been compounded by the rise of online gambling.
The proliferation of online casinos has led to a decrease in the number of visitors to the Casino Cosmopol facilities in Malmö and Gothenburg, making them financially unsustainable. As a result, Svenska Spel has chosen to shut down two of its three land-based casino facilities in an effort to limit losses.
This decision will leave Sweden with only one remaining land-based casino, which will be Casino Cosmopol in Stockholm. Unfortunately, the closure of the Malmö and Gothenburg venues could result in nearly 200 job losses.
Commenting on the closure, Ola Enquist, the chief executive of Casino Cosmopol, acknowledged the emotional impact of the decision on employees. Despite efforts to increase revenue and reduce costs, it became apparent that the measures taken were not sufficient to sustain the facilities.
In addition to the financial challenges faced by the Casino Cosmopol facilities, a recent anti-money laundering fine of SEK2m compounded their woes. This fine was issued following an investigation by Spelinspektionen, the Swedish regulator. Svenska Spel also received a warning in connection with the AML violations.
The closure of the Malmö and Gothenburg venues comes after a slowdown in earnings and income for Svenska Spel during the third quarter, attributed to market-wide pressures on the retail segment. The net gaming income for the Vegas operations and Casino Cosmopol experienced an 11% decline, and a loss of SEK35m was reported.
Additionally, the Swedish government’s plans to increase the gambling tax rate from 18% to 22% of GGR will add to the industry’s financial challenges. This increase is expected to come into force from July 1 of this year and has been met with opposition from industry leaders, who advocate for a differentiated form of taxation to mitigate the impact on certain sectors of the gambling industry.
These developments underscore the significant challenges facing the land-based casino industry in Sweden and the broader impact of the evolving gambling landscape.