Q1 2017 was a solid quarter for Betsson. We continued our strong casino performance. We continued the conversion of revenues from markets with higher revenue higher margin into locally licensed revenue. We continued our very strong growth in the Nordics and as we indicated last quarter, we turned back the Western European region into strong growth growing in the period of 16 growing in the period with 16%. During the quarter, we also migrated Europet to our common tech platform and the acquisitions of Netplay in the U.
K. And the licensed operator Premier Casino in Spain was completed. Total revenue in the quarter grew by 10.2%, of which the majority, 7%, 8% was organic, taking us to a total of $1,100,000,000 for the Q1. This despite the quarter being somewhat suppressed by lower than average sportsbook margins throughout the quarter, particularly in February March. We continue to have strong underlying activity.
Our deposits are growing by 8% despite currency headwinds in Central Eastern and Central Asia region. We have an all time high in active players, over 600,000 active players in the quarter. EBIT was 241,000,000 dollars slightly down 3.7%. This is partly or to a large degree related to the 50% increase we have in betting duties paid for local licenses in the quarter, now amounting to just above 43,000,000 We also have negative currency impact on the EBIT line of about SEK 19,000,000. Sports book margin the quarter is 6.1% compared to the rolling 8 quarter average of 6.6%.
Looking at the quarterly revenue or quarterly development then, revenue as mentioned up by 10%. Earnings per share slightly down due to the previous mentioned factors of local gaming taxes and currency, but also to slight increase in financing costs due to the bond we set. Bridging the revenue from the Q1 last year to the Q1 this year, it's clear that we are growing very nicely in the very competitive region of the Nordics. We grow also now very nicely in Western Europe. The Sieta region continues to be challenging both due to the currency, the pretty steep drop in the Turkish lira we have seen throughout the quarter as well as due to very low sportsbook margins at times.
Rest of the world continue to grow nicely. Looking at the long term trends for EBIT and the revenue, we know that Q4 is normally the strongest quarter. Consequently, the Q1 revenues are slightly below the Q4 number. We have had, as I mentioned, a low sportsbook margin throughout the quarter, particularly during February March. On EBIT, EUR 241,000,000 this is done despite a 16% decline in the Turkish lira throughout the quarter, which obviously puts pressure on our license fees from our associate partner Real and consequently our EBIT.
We have a 50% increase in the betting duties paid, now amounting to, as I said before, SEK 43,000,000 paid in the quarter. The trend we're seeing as converting revenues into locally licensed revenues will continue and over time we will be able to reap the benefits of this. But short term, it puts slight pressure on our margins. However, having said that, we also see that the regulated markets that we are in such as U. K, Italy is some of our fastest growing markets.
So the trend that we have talked about for over a year now is clearly there that the growth tend to increase in pace following legislation or local regulation. On the topic of the conversion of our revenue base, I wanted to sort of illustrate how this has looked from the Q1 in 2015 until the Q1 2017. This conversion is fully in line with our strategy to grow our locally licensed revenue and our share of locally licensed business. And if you look in Q1 2015, we had the acquisition of Europet, which added a chunk of locally licensed revenue for us. At that time, our associate partner Realum was 23% of our revenue and our locally licensed revenues was about 8% of our total.
Moving 1 year ahead to 2016 Q1, we had added 4 jurisdictions, 4 local licenses. We have started to see a quite dramatic fall in the Turkish lira, which had as a consequence that our revenue from our associate Real declined to 14% of our total, while our share of locally regulated revenue grew from 8% to 13%. Now looking into this quarter, Q1 2017, the trend continues. So our locally licensed revenue is now over 20% and the share from our associate partner Realum is below 12%, 11.6% to be precise. And on top of that, we have then of course acquired more revenue in locally licensed markets, net play in the U.
K. And so forth. And we also see in the quarter a continued drop of the Turkish lira. So this is a trend we have seen for the last 2 years and this is a trend that will continue. And underlying and fundamentally, we see this as very, very positive and in line with our strategy to convert our revenue base.
Looking then a bit more in detail on Real and the license revenue from our B2B associate. The revenue so the license fees in the quarter was $128,000,000 despite a 16% currency decline in the quarter, a currency decline that the year on year comparison continues into the 2nd quarter. However, we did see 9% growth in local currency and we had a slight growth also in the previous quarter. So we see somewhat change in trend when it comes to the local performance of the company. And I've been saying for quite a while now that we've seen a stabilization of that business and I repeat that and we see continued stabilization.
Now we actually saw some growth, but I would say that that growth is still fragile and I would like to stick to the statement that we see continued stabilization. Realme is now 11.6 percent of group revenues and as I said, stable outlook in local currency and we have continued currency uncertainty in that business. Now clearly, we're very excited about the growth in Western Europe. Very, very competitive region and region in Western Europe now with the growth of 16% in the quarter is bigger than our Sijeka region. Nordics also grow very strongly at 14% and I think it's fair to say that we take market shares in both those regions at the moment.
Decline in Sika, primarily due to the 16% drop in the currency, as I mentioned before, but also due to very slow sportsbook margins. And as indicated before, we continue to see a recently weak outlook for the Sika region for the next quarter or 2.
On the
product side, casino grew incredibly strong at 23%. Our mobile casino grew by 65%. And again, it's fair to say that we take significant market share in the casino space. And again, casino represents 75% of Beatson's business overall. Sportsbook down 15%, primarily due to the lower sportsbook margin that are well known at this point and our negative currency fluctuations.
Looking at the underlying sportsbook business, the turnover a bit. Although the sportsbook turnover is down on the top number from $6,700,000,000 to $6,000,000,000 the underlying turnover on our B2C brands is actually up 15%. And it's important to remember that the total turnover number for Sportsbook includes 100% to consolidate 100% of our B2B turnover, while our license share revenue share is obviously not 100%. Again, reiterate sports book margin at 6.1% and the 8 quarter rolling average is at 6.6%, which is a quite significant deviation. Other than strong underlying sportsbook turnover growth for our B2C business, we see strong underlying growth in active players, all time high in active players for the quarter and deposits up 8% despite currency impacts.
Now a little bit about our business. Netplay acquisition, most of these numbers are known by now, but the total consideration of £26,400,000 net of cash that equals about 19,000,000. The acquisition closed on the 31st March this quarter. We expect revenue for the full year 2017 to be around £25,000,000 We are starting to extract the synergies, but we're also having some restructuring costs in doing so. So the EBIT effect of the acquisition in 2017 will be limited.
We have a long term view of net play and it's very important for us to strengthen our position in the market. And with this addition of 20 €5,000,000 in locally regulated revenue, we feel we are very, very well positioned to continue to grow strongly in U. K, which is obviously one of the world's largest gaming markets. We also closed the acquisition of Premier Casino, locally licensed operator in Spain. This is a perfect example of a subscale operator that really don't have the volume to be able to grow in a regulated environment.
The acquisition closed on the 31st March as well, consideration of €3,000,000 and that gives bets on access and a foothold in the Spanish markets. It's also important to mention that although this is a casino only operator, they do have all licenses including a sportsbook license. 260,000 registered customers and it will be rebranded and operated under the name of Star Casino, which is the same name as our casino operator in Italy, obviously. On the product side, we added some products, snooker to our sportsbook offering. We added more live markets.
Interesting to note, BetSafe was also the 1st operator to actually pay out on Chelsea as Premier League winners before the Manchester United game a few weeks back. And we have a lot of exciting things coming in our sports book in the Q2 that I will talk to you about next time we meet. Casino, we're now at almost 1500 games on mobile, continue and reinforce our position as the world's largest casino. We had a number of exclusive games launched. And one of the most exciting one was of course Bloodsuckers 2, which was a huge success.
Europe at migration, it took a while. It was one of the most complicated migrations we have undertaken, but it's now migrated to our Techson platform and it gives them access to a brand new mobile casino or mobile solution, which clearly is the best mobile offering in that region. And we have high expectations of that coming into the latter part of this year and in 2018. On the regulatory side, then we added license to our portfolio. We now have 11 licenses across Europe.
We had 20.3 percent of our revenue was locally regulated or locally taxed. We paid SEK 43,300,000 in betting duties. As you all know, there also been a report in the period on the Swedish new law for gambling, a gambling regulation. This proposes an 18% tax on GGR. It proposes licenses for all products and implementation of that estimated to be at the earliest Q1 2019.
As for the reregulation of the Netherlands, there is some uncertainty around that, but as it stands now, we look at mid-twenty 19 for an implementation of that license. Short trading update on the revenue side. The revenue for the in the beginning of the second quarter was higher than the daily average for the same quarter last year and lower than the daily average for the Q1 2017. And again, that is in line with seasonality where the Q2 is normally seasonally weak. The underlying activity, however, turnover, active deposits remains very strong.
Other outlooks or outlook, as I said, Q2 is normally seasonally weak. We will continue to invest in marketing and in our product development. As a consequence of that, our operating expense in the Q2 2017 will grow slightly more than 10%, including acquired entities compared to the operating expense for the Q1 in 2017. And I talked about conversion of our revenue base. We expect that our revenue from regulated market will continue to grow.
The conversion will continue. This results, as I said, in lower margins over time, which is in line with our strategy to transform our business with to a higher share of regulated revenue. And it's also important to say that again reiterate, we do see this as a very positive thing because the local regulations creates new opportunities for growth. Now before we open up to questions, I wanted to introduce you to the newest member or one of the newest members of the Betson family. Arguably, Sweden's biggest athlete, possibly behind only Slapane Ibrahimovic at the moment.
Olympic gold medalist, world record holder, 100 meter butterfly. Welcome to Betson, Saga And I wanted us to just listen to Sarah and what she has to say about her challenge working with Obviously, all wonder what that is, but follow that space on betzon.com. Now thank you so much for listening. I would like to open up for questions.
Okay. Thanks. Martin Annel with BNB. My first question is on the trading outlook for Q2. You mentioned this is you're up year over year, but down quarter over quarter.
I mean, it's normal seasonality, I guess. But could you also comment on the performance of the sports book margin in April?
Yes. Sportsbook margin in April has been low on the low side and I think that's no news at this point. I saw some of the our colleagues commenting the same way yesterday. So it's been very, very low coming into April. However, as we know, it tends to even out over time.
Okay. Thanks. And do you care to give any sort of comment on the OpEx for the full year? You have now started to guide a bit on the next quarter, but what do you see sort of the medium term on the OpEx growth?
We always want more. No, we don't guide on that. What we've said previously is that last year we had a step change in cost of personnel and other cost to line items. We're not going to see step change this year, but we're going to doing we will increase our marketing expenditures somewhat.
And this One Betts on group initiative that you had taken in the casino, you're about to launch that in the sports book. Can you tell us more on that, the timing? And also, could you what sort of expectations do you have on that for sports book? Is it a similar effect you expect there or as in casino or?
We've done a very, very extensive job on the OPG generally. Rolled out casino and you've all seen the effect of the OPG rollout on casino, growing 20% last quarter, 23% this quarter. The rollout for the OPG sports book will start during or during this quarter, towards the end of this quarter on betzon.com and will then continue to be rolled out during the fall. We have obviously very high expectations of that as well. We feel that product and we've talked about that before is due for an update.
Effect of that, we should be able to expect towards the Q4.
Okay. And when you're in the casino, what's the main driver of your casino growth when it comes to product? What's the most successful product you have now in the casino?
In terms of Live or
slots or I mean
Yes, we grow very strong in all verticals. Obviously, Live is coming from slightly lower levels. So percentage wise, the Live numbers will stick out and look incredibly impressive. But the product as itself and what's driving the growth is the experience. It's total end to end experience that we feel possibly and arguably second to none at the moment.
And finally, just on Turkey, you're back at growth in local currencies. Anything that you could share on the local performance that any initiative that Real has taken that you feel is behind this or any more color on the performance in Turkey?
No, we work very closely with them to help them any way we can throughout this period and some of those initiatives are clearly having some effect. Realme is also eagerly awaiting the OBG sportsbook rollout towards the fall, which will help them further. But they've done a better work clearly this quarter than previously. But again, I wanted to reiterate that it's I look at it as a very fragile return to growth and I wouldn't rule out that we will be flattish again at some point. We still have some more work to do and with that I primarily refer to the OPG rollout of the sports book.
That is one of the key components for OEM to get back to the growth number that we have been used to.
Thank you.
Hi, Christian Hundmann from Nordea. A question on the guidance for this quarter. At the end of well, at the time of the Q4 report, you were talking about OpEx in Q1 being up in the high single digits, but it came in at flat. So what happened to the costs in Q1? Why didn't it decrease?
Yes, it's basically us managing the business. As I said, the Q1 started very strongly. We had a very challenging bit in mid quarter starting at 26th April, I think or starting at 26th February coming into March with very low sportsbook margins. And we decided to postpone some investments that was planned at this point into the Q2 basically to manage our business.
All right. So the cost that you were planning on taking, you will take and that's why you're guiding for plus 10% or something into Q2?
Yes.
All right. Correct. And the question just on acquisitions. Net play, when will that be migrating to Texan? Do you have any timeframe for that or?
The timeframe we said is 2019 simply because of the reason that's when the current agreement expires. So obviously we will at some point have discussions about breaking those possibly earlier or making some sort of commercial agreement. But at this point, current best thinking is that this will go on, on that platform until that agreement expires.
And which platform are they
on Playtech? They are on Playtech.
They are
on Playtech. All right. Okay. Thanks.
Questions from telephone conference? Thank
you. Our first question comes from the line of Rasmus Engeberg from Handelsbanken. Please go ahead. Your line is open.
Yes, good morning. I wanted to ask you some detailed questions on Ferste. You have a profit tax in Georgia. Is that reported in betting duties or in the profit tax?
Yes, the profit tax in Georgia. The profit tax is reported in betting duties in the betting duties number as long as they are not fixed fees for licenses. If they are fixed fees for licenses, they are excluded.
Okay. Thank you. And then I wanted to ask you about how much acquisitions contributed. Can you give us a figure for casino and then for Western Europe, but Tony Best was more than casino, right? It was a sports betting operation or is that discontinued?
No, no, it continues.
More than these two figures.
Yes. We haven't reported Tonnebaud separately, but that business continues and performs in line with the rest of our business.
So basically what would you say the contribution from acquisitions to sales is in this quarter?
Well, we haven't said that specifically, but what we said was of the 10.something% growth about 7% to 8% was organic.
Okay. Would you be willing to report this going forward, what the actual organic growth is just to increase the transparency?
Yes. And we will also report net play separately coming into the second quarter.
And on that matter, it's great that you report betting duties. Are you able to share with us the other quarters except Q1, I mean Q2, Q3, Q4 last year, for example?
We haven't done that in this report. Let me look into that and we'll get back to you, Rasmus.
Okay. Thank you. And then finally, I just wanted to ask you again on the cost guidance. It seems that you have a very high flexibility on your cost side because this is not the Q1 where you say that cost will increase much more and then when revenues don't follow plan, you cut back. Is that affiliate marketing or regular marketing?
Or what is it that is so flexible because it can't be staff, right?
No, it can't be staff. Consultancy, of course, are flexible as well. I wouldn't say very flexible. I think that's a bit of a strong statement. There are some there's always some flexibility in the P and L obviously and we're like I said, we're trying to manage this to the best of our ability to make sure that we adapt in the ways possible to the current market conditions.
And I think you mentioned a few line items and I think it's all of the above.
So the difference between flat OpEx and mid- to high single digit growth is basically cutback on marketing or is that correct?
Like I said, you're consultants, you're affiliate and you have the marketing line item that you can basically work around, yes.
Okay. Thank you.
Thank you. Our next question comes from the line of Victor Bellag from SEB. Please go ahead. Your line is
open. Yes. Hi, good morning. I have a question regarding I don't know, can you hear me because it sounds a bit weird on my phone?
Yes, we hear you.
Yes, okay. I have a question regarding the cost guidance as well, because it seems like I have a hard time seeing that top line will be up sequentially given how April started. Of course, there's some sports book quarter on quarter effect in that and everything, but there's also some seasonality within the quarter and everything. So if top line wouldn't be up to next quarter, you still see a 10% plus increase in OpEx?
Well, first of all, like I said before, you got to bear in mind that the second quarter is seasonally weak and sequential growth organic quarter on quarter between 1st and second quarter is reasonably
rare? Yes, of course. I'm not talking organic. I'm talking with acquisitions. And
that we don't guide on obviously, but what we said is that the revenue for the start of the quarter has been above that of the average of last year and below that of the average of the Q1.
Yes. Okay. Thanks.
Thank you. As there appear to be no further audio questions, I'll return the conference to the speakers.
Do you have another question, Martin? There's no questions from the chat, so
Yes. Just a follow-up question from me. I mean, at the last reporting, I think you mentioned that 2016 was a year with a lot of focus on development and that you saw an opportunity this year to go out and market this new product. Do you still repeat that communication? And could you give us some flavor of what kind of effect you see on earnings from this sort of shift?
Well, I still stick by that statement. I think if you're looking over the year, we see increased opportunity to market the product throughout the year, depending of course how quarters develop. On the second question, I think we've said that margin will have some the increase of locally regulated revenue will have some impact on margins over time as we saw in the slide. The marketing investment should not be impacting that, It should morally be a shift from our development into our marketing, generally speaking, over the year.
Okay. Thank you.
The last question from the web. Can you please be a little bit more specific on the growth in Great Britain and Italy? What has what are the main drivers behind the growth?
Well, last quarter we were quite specific on the growth in Italy and U. K. And we don't intend to keep reporting those markets individually. But what I can say is that the drivers in the U. K.
Is what I've been talking about for a long, long time and a casino product and a casino experience, a casino offering that I think holds up very, very well in these markets that tends to have a casino product or still have casino product that are single supplier solutions and so forth. And of course, in that environment, our casino product holds up very, very