Swedish iGaming Faces Slowdown Amid EU Pressures

A shift is becoming increasingly evident across Stockholm’s iGaming sector. Long regarded as a hub of growth and innovation, Swedish operators are now facing a more challenging environment, with recent results from Evolution AB highlighting changing market dynamics.

Stable performance, but changing expectations
Evolution reported first-quarter revenue of €513 million, broadly in line with the previous year. While profitability remains strong and operational efficiency continues to stand out, the company is no longer delivering the consistent outperformance that once defined its trajectory.

More notably, growth has slowed and margins are showing signs of pressure, pointing to a more complex operating landscape.

Europe losing momentum
A key factor behind this shift is regional performance. Europe, historically the backbone of Evolution’s business, has seen revenue decline both year-on-year and quarter-on-quarter, returning to levels last seen in 2022.

This trend reflects broader challenges across the region. Regulatory frameworks are becoming more demanding, taxation is increasing, and compliance requirements continue to evolve. At the same time, there are concerns that stricter rules may be reducing engagement on licensed platforms.

Wider industry impact
Evolution’s situation mirrors developments across other Stockholm-listed companies. Betsson AB has signalled a slight revenue decline, accompanied by a more pronounced drop in profits, driven by higher taxes and shifting market exposure.

Kambi Group has also reported declines in both revenue and earnings, citing similar pressures, including taxation and the loss of key partners. The company has indicated that Europe is no longer providing the same growth potential.

Meanwhile, MGM Digital is continuing its international expansion with support from LeoVegas, but at the cost of rising losses as investment levels increase.

Affiliate segment under strain
The affiliate sector is facing even stronger headwinds. Catena Media has recorded further revenue declines despite restructuring efforts, with its business now heavily reliant on North America.

Raketech is undergoing a significant strategic reset following a sharp drop in revenue, while Angler Gaming has managed to improve profitability primarily through cost reductions, even as player activity weakens.

Common pressures across the market
Several recurring challenges are shaping the current environment. Rising tax rates, stricter regulatory requirements and increasing compliance costs are all impacting performance. At the same time, the sustainability of regulated market participation is being questioned, with some operators concerned about potential migration to unlicensed alternatives.

Strategic shift beyond Europe
In response, Swedish operators are increasingly looking outside Europe for growth. Latin America has emerged as a key opportunity, while North America continues to attract investment despite higher costs. Asia is also being explored selectively.

This diversification reflects a broader effort to reduce dependence on European markets and maintain long-term growth prospects.

A changing outlook
Stockholm’s iGaming sector remains resilient, with many companies still generating strong profits. However, the overall tone has shifted.

Growth is becoming more difficult to sustain, Europe is no longer the reliable driver it once was and companies are adapting to a more demanding environment. What appears to be a modest slowdown may signal the beginning of a more structural adjustment across the industry.