Swedish Government proposes closure of Casino Cosmopol

Lea Hogg May 8, 2024

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Swedish Government proposes closure of Casino Cosmopol

The Swedish government has recently proposed to discontinue the Casino Cosmopol land-based casino business of state-owned operator Svenska Spel. In a memorandum filed on 7th May 2024, the government stated that Casino Cosmopol “no longer fulfils its purpose” and highlighted the ongoing challenges for the business to reach profitability.

The government does not anticipate the proposed closure to have any “major impact” on illegal gambling in Sweden. If the measure passes, a condition in Svenska Spel’s licence for the right to operate land-based casinos would be removed. Consequently, Svenska Spel would need to shut down its only remaining casino venue, located in Stockholm. The closure, expected to occur on or before 1 January 2026, would impact approximately 200 jobs.

Svenska Spel has acknowledged the struggles of Casino Cosmopol. The company shares the government’s assessment of reasons for closure, noting the lack of opportunity to reach profitability as visitor numbers fall with more people opting to gamble online.

Svenska Spel once operated four casino locations in Sweden. The first to close was the casino in Sundsvall in 2020. More recently, the company announced the permanent closure of its casinos in Gothenburg and Malm? due to limited profitability. The decision was announced in January of this year.

Svenska Spel CEO Erik Strand stated, “The movement from gambling in land-based casinos to gambling online accelerated after the reregulation of the gambling market in 2019 and the subsequent pandemic, when Casino Cosmopol remained closed.” He added, “We share the assessment that it is no longer possible to run Casino Cosmopol profitably.”

CEO Ola Enquist also accepted the news but described the move as an “end of an era”. He said, “Although we share the government’s assessment, it is emotional to take part in the bill. If it is adopted, it means that our last casino is closing and that an era is over.”

Recent financial results published by Svenska Spel show where Casino Cosmopol sits compared to its other businesses. In 2023, the Casino Cosmopol and Vegas arm posted a 12.0 percent drop in revenue to SEK942m (￡69.3m/€80.7 million/$86.9 million). This decline was attributed to a decrease in casino visitors in response to the rising popularity of online casino gaming.

Regulatory challenges

In contrast, Svenska Spel reported growth elsewhere. Revenue from the Tur lottery division climbed 0.6% higher at SEK4.92bn, while revenue from Sport & Casino was up 4.6 percent to SEK2.17 billion. Looking at net gaming revenue per sales channel, casino revenue fell 11.4 percent to SEK473million, while the online sector saw revenue grow 7.2 percent to SEK4.20 billion.

As for the most recent quarter, the closure of the two casino sites hit the Casino Cosmopol & Vegas segment, with revenue down 31.6 percent to SEK169 million. In addition to the closures, the group also reduced the operating hours of its remaining Stockholm venue.

In addition to these challenges, Casino Cosmopol has faced regulatory issues in recent months. In December, the casino was fined SEK2m for anti-money laundering failings after a probe by Swedish regulator Spelinspektionen. Svenska Spel was also warned over the matter.