Svenska Spel Announces Closure of Two Casino Cosmopol Venues over Profitability Issues

Summary:

• Svenska Spel will terminate Casino Cosmopol operations in Malmö and Gothenburg
• The closure is due to financial issues and will affect around 200 employees
• Svenska Spel prepares for major reforms this year under new leadership

Svenska Spel will shut down its Casino Cosmopol venues in Malmö and Gothenburg due to low profitability.

In an announcement this week, the state-owned Swedish gambling operator stated that it was forced to decide to close both properties to limit losses. The move will impact around 200 jobs, with Svenska Spel currently in talks with the union regarding the affected employees.

Svenska Spel to Shut Down Cosmopol Venues to Limit Losses

Svenska Spel’s Casino Cosmopol and Vegas Slot units have suffered declining revenues in recent years, absorbing losses of SEK 52 million (€5 million) for year-to-date trading. This prompted Svenska Spel to launch a strategic review of both units which resulted in the implementation of new measures aimed at increasing revenue.

Cosmopol in particular went through an organizational restructuring, reduced its workforce, introduced new opening hours, and came up with a new restaurant concept to boost its profitability. However, such measures have proved unsuccessful as the unit still struggled to turn a profit with visitor numbers continuing to fall. Thus, Svenska Spel was left with no choice but to terminate Cosmopol operations in the cities of Malmö and Gothenburg.

Svenska Spel’s outgoing CEO Patrik Hofbauer explained that the revenue declines experienced by its land-based units are due in part to the increasing popularity of online gaming. Hofbauer added that online casinos have grown strongly in the last 10 years, changing the conditions for running land-based casinos. The decision to close two of three Cosmopol venues is aimed at “limiting losses”, he said.

The shutdown will affect around 80 employees in Malmö and 120 in Gothenburg, Svenska Spel said. The operator has yet to provide details as to when the two properties will cease operations as it is still negotiating with the labor union. According to the operator, it has gathered inputs from Swedish trade unions in its review of Cosmopol.

The closures leave Sweden with just one land-based casino, the Casino Cosmopol in Stockholm.

Major Reforms on the Way

Svenska Spel will see major reforms this year, as it gets a new CEO, Anna Johnson, who will start her new role in June 2024. The operator is also set to launch its new sportsbook Oddset this year, in partnership with sports betting technology provider Kambi Group.