Svenska Spel, the state-owned gambling company in Sweden, has announced its plans to permanently close Casino Cosmopol facilities in Malmö and Gothenburg. The decision to shut down the two casinos was primarily driven by the limited profitability of the facilities due to a decrease in the number of visitors, largely attributed to the rise of online gambling.
The closure of the two facilities means that Sweden will now only have one land-based casino, which will be Casino Cosmopol in Stockholm. This decision is expected to impact nearly 200 jobs, and the chief executive of Casino Cosmopol, Ola Enquist, expressed that it is a tough step to take as it affects many employees.
This announcement comes in the wake of a SEK2m fine that Casino Cosmopol received for anti-money laundering (AML) violations, after an investigation by Spelinspektionen, the Swedish regulator. Svenska Spel also received a warning in addition to the fine.
The decline in earnings and income at the Casino Cosmopol facilities was also cited in the report from the third quarter by Svenska Spel, with the company attributing the slowdown to market-wide pressures on the retail segment. The net gaming income for the Vegas regions of Svenska Spel’s operations and the Casino Cosmopol experienced an 11% decline to SEK247m, while also reporting a loss of SEK35m.
In response to the financial challenges, Svenska Spel tried to adjust its business methods at Casino Cosmopol, including presenting new opening hours to combat competition from restaurant casinos. However, these measures were deemed insufficient, leading to the decision to permanently close the Malmö and Gothenburg facilities.
The gambling industry in Sweden is also facing challenges from the government’s plans to increase the gambling tax rate from 18% to 22% of GGR, which is set to come into force from July 1 of this year. The proposed increase in taxes could collect an extra SEK540m in tax income every year. However, the gambling industry is urging the government to reconsider its suggestions and adopt a differentiated form of taxation.
The closure of the Casino Cosmopol facilities and the proposed increase in gambling tax rate have underscored the challenges facing the gambling industry in Sweden due to changing consumer habits and regulatory pressures.