In a memorandum filed today (7 May), the government says Casino Cosmopol “no longer fulfils its purpose”. It also notes ongoing challenges for the business to reach profitability.
The government added it does not expect the proposed closure to have any “major impact” on illegal gambling in Sweden.
Should the measure pass, a condition in Svenska Spel’s licence for the right to operate land-based casinos would be removed. In turn, Svenska Spel would need to shut down its only remaining casino venue, which is located in Stockholm.
Casino Cosmopol Stockholm would need to close on or before 1 January 2026. The casino can remain open and continue to operate until this date. Approximately 200 jobs would be impacted by the closure.
Svenska Spel acknowledges Casino Cosmopol struggles
Reacting to the news, Svenska Spel says it shares the government’s assessment of reasons for closure. It notes the opportunity to reach profitability is “lacking”, with visitor numbers falling as more people opt to gamble online.
At one point, Svenska Spel operated four casino locations in Sweden. The first to shut was the casino in Sundsvall, which closed its doors for good in 2020.
More recently, Svenska Spel announced the permanent closure of its casinos in Gothenburg and Malmö due to their limited profitability. The decision was announced in January of this year.
“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,” Svenska Spel CEO Erik Strand said.
“Our review of Casino Cosmopol has taken place in close dialogue with our owner. We share the assessment that it is no longer possible to run Casino Cosmopol profitably.”
CEO Ola Enquist also said he accepted the news but described the move as an “end of an era”.
“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,” Enquist said.
“This of course affects all of us who work at Casino Cosmopol. As an employer, we will do everything we can to support our employees. We will also stay open as usual and continue to take care of our guests.”
Casino Cosmopol lagging behind growth elsewhere
Glancing at recent financial results published by Svenska Spel, it is clear to see where Casino Cosmopol sits compared to its other business.
In 2023, the Casino Cosmopol and Vegas arm posted a 12.0% drop in revenue to SEK942m (£69.3m/€80.7m/$86.9m). This, Svenska Spel said, was due to a decline in casino visitors in response to the rising popularity of online casino gaming.
Decline here came as Svenska Spel reported growth elsewhere. Revenue from the Tur lottery division climbed 0.6% higher at SEK4.92bn. Meanwhile, revenue from Sport & Casino was up 4.6% to SEK2.17bn.
Looking at net gaming revenue per sales channel, casino revenue fell 11.4% to SEK473m. In contrast, the online sector saw revenue grow 7.2% to SEK4.20bn.
As for the most recent quarter, the closure of the two casino sites obviously hit the Casino Cosmopol & Vegas segment, with revenue down 31.6% to SEK169m. In addition to two properties closing, the group also reduced the operating hours of its remaining Stockholm venue.
In addition to this, it has faced regulatory issues in recent months. Back in December, Casino Cosmopol was fined SEK2m for anti-money laundering failings after a probe by Swedish regulator Spelinspektionen. Svenska Spel was also warned over the matter.
Original article: https://igamingbusiness.com/casino-games/swedish-government-proposes-closure-of-casino-cosmopol/
