LeoVegas Insider Trading Scandal May End Soon

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The LeoVegas insider trading scandal may end soon. That’s because “a top manager at LeoVegas” and two of his “cronies” were recently arrested in connection with the investigation, according to the Swedish newspaper Aftonbladet.

In June, the Swedish Economic Crime Authority (SECA) started the inquiry into the activities at the Stockholm-headquartered online gambling operator now owned by Las Vegas-based retail casino giant MGM Resorts International,

On Friday, Christoffer Nilsson reported for Aftonbladet that:

Yesterday, three men were arrested on suspicion of serious insider trading. One of the men has a high-ranking position at the gambling company and is said to have been present at the raid itself.

Nilsson quotes SECA Senior Public Prosecutor Pontus Hamilton that the LeoVegas insider trading scandal allegedly resulted in millions of kroner in profits.

However, SECA didn’t immediately respond to a Bonus request for comment.

SECA, LeoVegas, and MGM also had no news on their sites or social media about the arrests.

So it’s unclear whether Aftonbladet’s reporting is accurate, if there will be more arrests, or if the investigation is concluded.

In the meantime, MGM leaders say LeoVegas is its important non-US online gambling partner. In addition to its current international presence, LeoVegas may soon expand into markets like Brazil, according to MGM’s most recent earnings call.

MGM, which jointly runs US online casino market leader BetMGM with Entain, finalized its purchase of LeoVegas in September. Stockholm-based “indirect subsidiary” MGM Casino Next Lion (MGM CNL) paid $604 million. 

Update: 11/21/2022 – IR Director Arrested: Reports

Philip Doftvik was more than “a top manager at LeoVegas.”

He was the public face of the company.

The corporate finance and investor relations director was the contact person for analysts and reporters on all LeoVegas publications.

His LinkedIn account shows he was active on it last week. He even posted a LeoVegas job opening two weeks ago – ironically for an M&A project lead.

And on Thursday, EGR reported Doftvik was the company official arrested on Nov. 10.

Bonus sent Doftvik an email today to confirm EGR‘s report. However, Bonus received an automated “out of office” reply from Doftvik’s email address and a reply from one of the representatives named as an emergency contact. She referred all questions to a general press inbox.

Bonus also didn’t receive immediate replies to requests for comment from SECA and the Stockholm District Court, which is prosecuting the case.

Update: 11/15/2022 – SECA Confirmation, Comment

SECA Press Officer Niklas Ahlgren responded to Bonus today:

We can confirm that this is an ongoing investigation into suspected insider trading and that 3 individuals are currently in custody in the case.

Bonus will continue to monitor this matter.

What LeoVegas Insider Trading Arrests Mean for MGM

Despite Aftonbladet reporting on the LeoVegas insider trading arrests on Friday, MGM stock rose nearly 1% today.

Along with those stock figures, news outlets mentioned China’s eased Covid-19 precautions. Those headlines about the reduced guidelines arose shortly after the White House reported President Joseph R. Biden, Jr. and Chinese President Xi Jinping met today in Bali, Indonesia.

While that release didn’t mention gambling or Macau, speculation immediately began about economic recovery for retail casinos there.

That includes MGM’s resorts on the island: MGM Macau and MGM Cotai.

Gambling is illegal in mainland China, but Macau is known as the world’s casino capital.

So Macau, BetMGM, and LeoVegas hold current and future promise, said MGM CEO and President Bill Hornbuckle on Nov. 2 during MGM’s Q3 2022 earnings call.

In The Motley Fool transcript, Hornbuckle said:

Our investment in BetMGM and LeoVegas will allow us to continue to drive our omnichannel strategy, a key competitive advantage that over time allows us to generate incremental earnings between our brick-and-mortar and our online channels. Early results of this strategy have been positive with a strong acquisition story, as well as the creation of brand stickiness. Of the players that play in both channels, we’ve seen a younger customer, in fact, almost 90% of the BetMGM omnichannel customers who visit Vegas are younger than 50 and over 50% are under the age of 35.

The earnings call didn’t include a single mention of the investigation.

So the upshot of the LeoVegas insider trading scandal possibly ending soon seems to be less than an afterthought to MGM. Company leaders seem to be moving forward, not looking back toward June.

About the Author
Heather Fletcher

Heather Fletcher

Heather Fletcher is Lead Writer at Bonus, concentrating on online casino coverage. She specializes in breaking news, legislative coverage, and gambling marketing strategy overviews. To reach Heather with a news tip, email [email protected]

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