The merger of the two state-owned gambling companies in Denmark, Danske Spil, and Det Danske Klasselotteri, that took place at the beginning of April, 2022, has brought in higher gross gaming revenue (GGR) and better profits after tax during the third quarter of 2022.
The Merger of Two State-Owned Gambling Companies Offset Decline in Gambling Activity in Q3
Danske Spil reported total gross gaming revenue of DKK 3.6 billion ($474 million) and profit after tax of DKK 1,3 billion ($171 million) in the third quarter of 2022 ending on September 30.
This marks a slight increase compared to the same period last year, with GGR being DKK 64 million ($8.4 million) or 1.8% higher and the profit after tax being DKK 36 million ($4.7 million) higher.
The reasons for the increase in GGR are several shifts including declines in sports betting and casino play. This is offset by the inclusion of the Det Danske Klasselotteri, the Danish lottery, from 1 April 2022 and GGR from Elite Gaming’s physical gaming halls.
The increase in profit after tax is mainly attributable to the inclusion of Det Danske Klasselotteri A/S.
The total GGR is dispersed between the various Danske Spil games with the Danish National Lottery bringing the most revenue of DKK 2 billion ($263 million), which was a very slight increase in comparison to the same period last year.
Danske Licens Spil accounted for DKK 1.2 billion ($158 million) of the total GGR, which marked a decrease from the 1.4 billion ($184 million) reported in Q32021.
Elite Gaming was responsible for DKK 223 million ($29.3 million) in Q32022, up from DKK 131 million ($17.2 million) in Q32021.
To the total pool of GGR, the addition of Det Danske Klasselotteri brought in a further DKK 131 million ($17.2 million).
The Merger Between Danske Spil and Det Danske Klasselotteri
Danske Spil was merged with Det Danske Klasselotteri on April 1, 2022, after a decision by the Danish government.
The Danish government made this decision as it expects that the merger will create positive effects because Det Danske Klasselotteri and Danske Spil are facing a continued digital transformation that requires ongoing investment.
At the same time, the two companies – in line with the government’s expectations – are developing ongoing initiatives to promote responsible gaming, and thereby the merger will help them take the lead in the fight against, for example, money laundering and gambling addiction.
Both digitalization and responsible gaming require strategic management and investment, where one company can create an even better framework.
In addition, the merger is expected to allow for operational savings.