Danish national lottery operator Danske Spil highlighted in its first half financial report that growth in its lottery segment was driving revenue growth, a trend that has continued since the first quarter.
Danske Spil said the lottery growth was due to improved financial results and the integration of the class lottery into the business since April 2022.
The operator reported revenue of DKK 2.47 billion (£280 million/$360 million/€330 million) for the first half of 2023, an increase of 5.2% on the DKK 2.25 billion, which the company achieved in the same period last year.
As mentioned earlier, lottery growth was the catalyst for the increase. The company’s lottery division achieved sales of DKK 1,368 billion, DKK 59 million more than the previous year. The class lottery recorded growth of 75.4% to DKK 121 million.
Meanwhile, the company’s betting revenue increased slightly from DKK 822 million to DKK 830 million. The company’s slot machine subsidiary, Elite Gaming, saw revenue increase from DKK 146 million to DKK 147 million.
The company said the increase was due to the growth of its online sports betting offering. However, it was highlighted that the casino segment continues to stagnate. Danske Spil attributed this to new responsible gaming initiatives the company has introduced, including lower deposit limits.
Meanwhile, fantasy sports store Swush doubled its revenue to DKK 6 in the reporting period. However, due to its small size, it had a negligible impact on the company’s financial results.
Danske Spil sees increased external and personnel costs
In addition to the increased revenue, Danske Spil experienced an increase in costs during the reporting period. The company reported that its total costs increased by DKK 33 million to DKK 649 million compared to 2022.
The company said this was due to the impact of inflation and the merger with the Class Lottery. In addition, 23 additional employees joined the company as a result of the merger. These new hires resulted in personnel costs increasing by 11.4% to DKK 196 million.
According to Danske Spil, external costs increased to DKK 351 million, compared to DKK 322 million that the company spent in the six-month period last year. However, the operator’s depreciation costs decreased slightly compared to the previous year to DKK 102 million.
Higher revenue leads to higher profits
Taking costs into account, the company achieved a pre-tax profit of DKK 1.17 billion. This compares to last year’s DKK 1.09 billion achieved during the same period in 2022.
Danske Spil recorded an increase of DKK 7 million to this total due to the company’s financial activities, in contrast to the loss of DKK 67 million the previous year.
The company attributed this increase to better interest income on its cash and a decline in prices in its securities portfolio in 2022.
After deducting taxes of DKK 259 million, the company reported a total profit of DKK 915 million for the period. This is an increase of 14.9% compared to the DKK 796 that the company announced in the same period last year.