Danske Spil, the national lottery and gaming operator of Denmark, has released its financial results for the first half of 2024, showcasing a solid performance that underscores its position as a market leader in the Danish gaming sector. For the six months ending June 2024, the company reported a 3% year-on-year increase in total gross gaming revenue (GGR), reaching DKK 2.55 billion ($379.30 million). This upward trend was accompanied by a sharp rise in profit after tax, which grew by DKK 85 million to DKK 1 billion.
The company attributed much of this success to strong results in its lottery segment, especially from high jackpot games like the Eurojackpot, and a product update for Lotto that continues to yield positive effects. Despite a slight downturn in the Danish License Games segment, the first half of 2024 marked significant milestones in both revenue generation and responsible gambling efforts.
Financial Performance and Growth Drivers
The headline figure of DKK 2.55 billion in GGR marks a steady 3% year-on-year growth, signaling the operator’s resilience in a competitive industry. The DKK 85 million jump in profit after tax, bringing the total to DKK 1 billion, represents an even more remarkable achievement, demonstrating that Danske Spil is not only increasing its top-line revenue but also managing costs and operations effectively to boost profitability.
A primary driver of this growth has been the company’s robust lottery offerings, with Eurojackpot being a standout performer. The game continues to draw in large player pools, thanks in part to its high jackpots and wide appeal across various European markets. In June 2024, a Danish player won the largest jackpot in the country’s history, amounting to DKK 760 million ($112.8 million), a win that significantly boosted both public interest and revenue.
Danske Spil has also credited a product innovation introduced to Lotto in 2023 for contributing to the sustained success in its lottery segment. This change revitalized customer engagement and has led to consistent participation, which has in turn strengthened overall revenues.
Lottery Segment: The Core of Danske Spil’s Growth
The lottery segment, encompassing Lotto, Eurojackpot, and other games, continues to be the backbone of Danske Spil’s operations. The record-setting win in Eurojackpot this June not only brought widespread attention but also underscored the immense appeal of the game. High jackpot pools have been a key component in driving lottery sales, particularly when paired with effective marketing campaigns and broad participation across the country.
Moreover, the adjustments made to Lotto in 2023, which included product enhancements and customer-focused innovations, have borne fruit in the first half of 2024. These strategic moves ensured a steady stream of players, allowing Danske Spil to capitalize on customer loyalty while attracting new entrants to the game.
This success is especially notable considering the broader challenges facing the gaming industry, including increased competition and evolving customer preferences. By maintaining a strong presence in the lottery sector, Danske Spil has been able to mitigate risks and leverage its strengths.
Challenges and Decline in Danish License Games
While the lottery segment has been flourishing, not all areas of Danske Spil’s portfolio have shared the same trajectory. The Danish License Games division, which includes online casino and sports betting operations, experienced a slight decline in gross gaming revenue during the first half of 2024. This decrease reflects the challenges posed by a saturated Danish gaming market, where increased competition and evolving player behaviors have made it difficult to sustain growth.
However, despite the decline in revenue, there are signs of optimism for the sports betting segment, particularly due to the surge of interest surrounding Euro 2024. The football tournament, which drew attention from bettors across Denmark, led to an uptick in customer engagement with Oddset, Danske Spil’s sports betting brand. This spike in interest signals the potential for recovery in the second half of the year as major sporting events continue to unfold.
Diversification of Revenue Streams: The Success of The Danish Class Lottery and Elite Gaming
In addition to its flagship lottery products, Danske Spil’s other divisions, such as The Danish Class Lottery and Elite Gaming, have posted positive results for H1 2024. Both divisions saw an increase in revenue during this period, reflecting the company’s ability to diversify its income streams effectively.
Elite Gaming, Danske Spil’s land-based gaming division, benefited from a return to in-person gaming as restrictions from prior years continued to ease. Meanwhile, The Danish Class Lottery, a smaller but historically significant part of the company’s portfolio, has shown steady growth, further enhancing the operator’s overall financial performance.
This broad-based growth highlights the strength of Danske Spil’s diversified portfolio. By maintaining a balanced approach across multiple gaming segments, the company has been able to absorb the impact of the downturn in Danish License Games while still reporting solid overall financial results.
Strategic Shift: Sale of Swush Stake and Streamlining Operations
As part of its broader strategy to focus on core operations, Danske Spil sold its stake in Swush, a fantasy sports platform, back in January 2024. This divestment allowed the company to streamline its business and concentrate resources on areas that align more closely with its long-term growth strategy.
By divesting non-core assets, Danske Spil is positioning itself to better capitalize on its strengths in lottery and sports betting, while also simplifying its operational structure. This focus on core competencies will be critical as the company seeks to navigate an increasingly competitive landscape in the gaming industry.
Responsible Gambling Initiatives and Corporate Social Responsibility
Danske Spil’s financial success in the first half of 2024 was complemented by its ongoing commitment to responsible gambling. Both Chairman of the Board, Peter Christensen, and CEO, Nikolas Lyhne-Knudsen, emphasized the company’s dual focus on profitability and social responsibility. Danske Spil has continued to strengthen its measures to ensure that its games are enjoyed in a safe and secure environment, prioritizing the well-being of its customers.
The company has implemented a range of initiatives aimed at promoting healthy gambling habits and preventing gambling addiction. These efforts include setting stricter limits on betting, offering self-exclusion options for vulnerable players, and raising public awareness about the risks associated with gambling. By taking a proactive approach to responsible gambling, Danske Spil is not only enhancing its reputation but also ensuring the sustainability of its business model.
Christensen praised the company’s ability to balance financial success with social responsibility, noting that Danske Spil’s growth is grounded in a commitment to community well-being. Similarly, Lyhne-Knudsen highlighted that the company’s mission is to generate profit for the community while ensuring that customers can enjoy their games responsibly.
Full-Year Outlook for 2024
Despite the mixed performance across its different business segments, Danske Spil remains confident in its ability to meet its financial targets for the full year. The company has maintained its forecast for 2024, projecting gross gaming revenue of between DKK 5 billion and DKK 5.2 billion and profit after tax in the range of DKK 1.8 billion to DKK 1.9 billion.
This optimism is driven by the expectation that lottery games will continue to perform well, supported by ongoing customer interest in Eurojackpot and other lottery products. Additionally, the recovery seen in the sports betting segment during Euro 2024 bodes well for future growth, as customer engagement remains high.
The company’s decision not to revise its full-year expectations reflects its confidence in the strength of its core business and its ability to navigate challenges in other segments.
Industry Comparison: Veikkaus’ Struggles in Finland
Danske Spil’s strong performance in H1 2024 contrasts sharply with the results reported by Veikkaus, the Finnish state-owned gaming operator. Veikkaus experienced a 20.4% decline in operating profit during the same period, highlighting the challenges faced by some gaming operators in navigating regulatory changes and increased competition.
Veikkaus’ struggles illustrate the difficulties that many state-owned operators face in adapting to an increasingly competitive and regulated market environment. In contrast, Danske Spil’s success underscores the importance of innovation, diversification, and a strong focus on customer engagement.
Challenges and Opportunities for H2 2024
As Danske Spil moves into the second half of 2024, the company faces a number of opportunities and challenges. On the positive side, the success of Euro 2024 in driving customer interest in sports betting could continue to provide a boost to the company’s revenue. Additionally, the ongoing popularity of Eurojackpot and other lottery games is expected to keep driving growth in the lottery segment.
Challenges remain, particularly in the form of increased competition in the online gaming and sports betting markets. The company will need to continue innovating and enhancing its product offerings to maintain its competitive edge and ensure sustained growth.
Danske Spil’s performance in H1 2024 reflects a well-executed strategy that has successfully balanced growth with responsibility. With strong financial results, a commitment to responsible gambling, and a clear focus on core operations, Danske Spil is well-positioned to continue its success in the second half of 2024.