Pride to Stay Put: Leo Vegas cancels planned Malta move amid more financial restructuring
European online casino umbrella brand Leo Vegas announced they had canceled their scheduled move to a larger head office on the Mediterranean island of Malta from their existing HQ in the Swedish capital, Stockholm.
As part of a raft of other cost-cutting measures expected to save up to €4 million ($4.4 million) a year, the company will also be bringing its Rocket X independent brand back into the main company fold.
Rocket X is a white label casino service providing a platform and software options to third-party casino operators. Brands that use the service include BetUK, SlotBoss, and 21.co.uk.
Last month, Leo Vegas also announced the withdrawal of its Royal Panda brand from the United Kingdom market.
Efficient Organization and Savings
Canceling the Maltese office contract scheduled to start in 2021 will save the company an estimated €1.7 million a year. The move was partly prompted by staff reductions over the course of 2019, which means less office space is now needed than previously planned for.
The movement of the Rocket X brand into the main Leo Vegas fold is also expected to cut about €2 million a year off the department budget, with the bulk of those funds saved on marketing, staff payments, and customer service.
“The consolidation of brands into one and the same platform will contribute to large economies of scale in the group—both by allowing us to fully utilize our multi-brand technology and through a more efficient organization,” said group CEO Gustaf Hagman in a press release.
However, any reductions in expenditure will be offset by the cost of closing Royal Panda in the UK market. That early cancellation of their license, with expected revenue losses, will cost Leo Vegas a one-off €10 million.
Restructuring costs will account for another €6 million, although this will be covered by savings in the long term.
Investors can expect to see this outlay reflected in the group’s Q4 2019 reports, which are due later this month (February 14th).
However, it’s not all doom and gloom for LeoVegas AB, which is publicly listed on the Swedish NASDAQ.
“Royal Panda (…) can now focus fully on growth outside of the UK and also launch the brand in a couple of new markets in and outside of Europe,” continued Mr. Hagman in his statement.
Q3 results for the other 13 brands the company operates in the UK market were positive, with 15% growth recorded on average. This includes their flagship casino, Leo Vegas, which this week announced a new deal with much-improved live casino provider Pragmatic Play.
With former team members from sector top-dog developer Evolution Gaming now on board at Pragmatic, their live casino product has seen a huge revamp over the past year, and this new deal with Leo will hopefully be a good reward for their efforts.
“Pragmatic Play has done a great job to build a strong selection of classic table games, and I think it will be a great addition to our product portfolio,” said Leo’s Head of Live Casino, Rokas Benetis.
On top of that, Leo Vegas Group recently hired a new marketing director and announced its intended expansion into Spanish and South American markets.
All eyes will be on the group’s reports when they’re released later this month, so we’ll be sure to update you on the financial outlook for this major European operator when its stats become available.