Following the June revocation of its subsidiary’s operating license, Global Gaming 555 (GLOBAL:FN Stockholm), has reported that its Q2 revenue plummeted 42 percent year-on-year to SEK 132.2m ($13.8m), during what was described by chief executive Tobias Fagerlund as “the most turbulent and difficult” period in the Malmö-headquartered operator’s history.
The Scandinavian nation’s gambling regulator Spelinspektionen revoked SafeEnt Ltd’s online casino and sports betting licenses after reportedly finding the Ninja Casino parent company’s social responsibility and anti-money-laundering (AML) measures to be inadequate.
According to a recent report, Chief Executive Officer, Tobias Fagerlund, stated…
“It is no understatement to say that the last three months have been the most turbulent and difficult in the history of Global Gaming.
“We published our previous report with the belief that the changes we had made with regard to the CEO post, the general changes in the organization, and the comprehensive and swiftly implemented set of other corrective measures would pave the way for our return to positive figures and growth.
“When we got to the month of June, we positively thought we could realistically expect to be back into black figures already in the second quarter, thus achieving the intended turnaround. Everything changed on the morning of June 17th, when the Swedish Gambling Authority announced that they had withdrawn – with immediate effect – the gaming license that lay at the foundation of the Group’s Swedish operations.
“The Swedish Gambling Authority justified its decision citing serious deficiencies in the business in matters of responsible gaming and Anti Money Laundering measures. Those who have followed the extensive media coverage of the decision know that we do not share the Swedish Gambling Authority’s opinion and have there-fore appealed it.”
Revenue takes hit:
In Q2, profit after tax bore the brunt of the hits, with Global reporting a staggering 136 percent fall compared to Q2 2018, while profits were negative SEK11.8m for the period ended June 31, 2019, a drop from last year’s SEK28.9m.
Profits after tax for the first half of 2019 fell by 195 percent since last year. Cash flow from operations, meanwhile, suffered a similar fate courtesy of a 154 percent drop.
On June 20, the Administrative Court in Linköping denied the subsidiary’s bid to continue to offer online gambling in Sweden while it appeals the revocation of its local license. And while the company is still appealing the Spelinspektionen regulatory body’s decision, across the board declines have for the most part been attributed to ‘draconian measures’ and ‘substantial organisational changes.’
“The events of this Spring and Summer affect our business in every way, and we are now facing a challenge we have never faced before. Global Gaming has grown at an incredible pace over the past year, yet from where we stand today, we can only acknowledge that we too have made mistakes during the time we grew from a total newcomer to one of Sweden’s most recognisable brands.
“In the short term, it has been about damage control, cost control, and finding solutions to continue moving forward and creating the conditions for a return to profitability.
“Considering the uncertainty of our situation, I think that we have acted both quickly and resolutely. With these substantial organisational changes implemented here and now, and with the swift choice of a new technology approach, we have managed to quickly create the conditions that will enable us not only to face but to also operate in our new reality.
“Despite the draconian measures and drastic organisational changes we are facing, we cannot fail to notice that, internally, our fighting spirit and will to prevail are very much alive, which in itself creates conditions we should not underestimate.
“The future will undoubtedly place great demands on us as an organisation, as well as on me as its CEO. We must live with the consequences of past mistakes but we can also learn and grow stronger because of them. What I can promise is that we will do our utmost to get back to profitability and growth – and I believe we’ll be successful.”
While the Nordic operator is dealing with its ongoing regulatory headache, the company recently announced that as a first step in its new partnership agreement with real money gaming platform and solutions specialist, Finnplay Group, it would be launching NannoCasino.com, in Sweden within the coming weeks. The new online casino brand will reportedly operate under the Swedish license held by Viral Interactive Ltd, Finnplay’s subsidiary.