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Hero Gaming Sells Three Swedish Online Casinos To Paf
By Shane Addinall Aug 11, 2021 IndustryHero Gaming and Paf close a deal nearly two years in the making which sees the former exit the Swedish market and the latter become one its largest operators. Join us we discuss why this happened and what it means for the marketplace.Hero Gaming, the parent company behind the popular gamified gambling site Casino Heroes, has decided to sell three of its Sweden-focused casino brands to Åland Islands-based Paf.
Tomas Bäckman CEO, Hero Gaming, explains why this is not a “market exit”:
“If looking at the first quarter 2021 Sweden accounted for approximately 15% of our total revenues. So as said, this is not to be seen as an exit from our side, rather the opposite – we’re optimizing our company structure and strategy for continued growth while at the same time paying back some well-deserved dividend to our patient shareholders”
With half of the brands in their portfolio only generating 15% of their revenue it makes commercial and opportunity-cost sense to sell that arm of the business and refocus the human capital involved on the services and products that generate 85% of their income.
Getting Back to Basics
By divesting the company of brands that pulled focus while delivering very little to the company’s bottom line Hero Gaming is now back on track to fulfil its original mission, delivering gamified casino content in the B2B space.
Bäckman commented on their next step saying:
“Hero Gaming is first and foremost a technology company with its own platform. We will now put even more focus on this fact by providing more of our technology development and services to our selected B2B partners”
The company will specifically be looking to assist their B2B partners who are looking to carve out a niche in non-European sectors such as Asia and LATAM. They believe their suite of tools offers a fantastic opportunity for these casinos to launch viable localised offerings in those regions.
Moving On Up
The agreement has been a winning decision for both companies with Paf increasing its market share to become the sixth largest iGaming company in Sweden.
Christer Fahlstedt clarified Paf’s view on the Swedish market saying:
“This acquisition shows that we have faith in the future of the Swedish market and we also have the capacity to acquire the companies that strengthen us,”
As always the proverbial ‘new broom’ will ‘sweep clean’. In the case of Pafs management of Speedy Casino, Speedybet and Speedyspel it was confirmed that their stringent inhouse safer gambling rules will be introduced shortly.
Fahlstedt reiterated their view on responsible gambling stating:
“We do not have an interest in taking over the gaming sites unless their customers are largely at a gaming level that we accept. But of course, customers will notice that we value responsible gaming very strongly, to the same level of responsible gaming that we have on Paf’s other gaming sites,”
The most immediate impact that Paf’s ownership will have at a player level will be the institution of their mandatory loss limits. All Paf casinos restrict player losses to a mere €2000 per year, across their network of sites.
While this limitation will not be met with positive responses from higher value players, Paf has shown sustainable market growth despite lowering its projected income by €3 million under this regime. Their logic is they would rather have safer gamblers who spend a little consistently than high rollers who lose a lot and run the risk of financial ruin.
A commendable and profitable approach based on the fact that during the pandemic Paf reports a €26 million profit and held €40 million in trust to support charities and other outreach programs.
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