German rule change carves dent in Q2 revenues

German gambling treaty dents revenues
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While Germany’s new interstate gambling treaty did not officially take effect until 1 July this summer, the requirement for incumbent operators to abide by rules ahead of time, the first signs of impact were glaring in the last round of financials.

 

LeoVegas, which is not sticking around in the market, said its German revenues fell by 81 percent in the three months to 30 June. “The situation in Germany coupled to reregulation, with strict product limitations, an extremely high gaming tax and a skewed competitive situation, is having a negative effect on the group,” said the firm’s chief Gustaf Hagman.

“We believe it will take time to create a balanced and fair market climate and have therefore chosen to shift our investments to other, more profitable markets. Over the long term we still believe that Germany, with Europe’s largest population, offers great opportunities for the group.”

Despite also posting losses, Entain had an altogether more positive approach citing huge spike in betting during the Euros helping to overcome a dramatic fall in gaming revenues due to new restrictions on online casinos especially. Sports betting was up 53 percent, they said, somewhat consolation for the 34 percent fall in gaming revenues.

“The biggest impact has been on gaming with the lack of policing creating an uneven playing field,” said CEO Jette Nygaard- Andersen, who lamented that it was hard to find suppliers who were up to speed with the new rules. As a result many were “not differentiating between compliant and non-compliant.”

Bet-at-home also noted the negatives of the new regime, complaining (amidst another revised now profit projection, that many of its customers in Germany had not yet completed the mandatory re-registering service required to use the new platform.


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