Despite the recently announced gaming regulations for the German market, GVC Holdings, the giant betting operator in the United Kingdom is confident that it will be able to successfully overcome regulatory clouds in some of its key markets and in emerging markets such as German.
The English operator considers it unlikely that the restrictions set forth in the German State Gaming Treaty will apply strictly until 2021, when a definitive and permanent agreement on games will be given.
GVC, the second largest online gambling operator in the United Kingdom, revealed that constant currency revenues in Germany increased by 23%. The holding expects its leading brand Bwin to continue attracting more bets and players for its online games. Only in online games GCV obtained 55% of its income in Germany.
Following a meeting with members of the Darmstadt Regional Council, which is responsible for managing the licensing process in the state of Hesse, GVC said that it is necessary to obtain “greater significant clarity” from the agency on regulatory terms and deadlines.
According to GCV, the lack of clarifications would only cause delays in the process of issuing sports betting licenses, which will begin on January 2, 2020. The State Treaty that will be in force until June 30, 2021, could cause delays and legal controversies that will stop the launch of sports betting regulated by the German government.
“Therefore, there is a realistic possibility that the regulatory position will not be resolved until 2021, when a new positive regulation of the German sports betting and online gaming market is expected,” said the UK operator.
Consequently, GVC prefers to trust that it will be able to continue operating in the German market with bets in play, which include results of football matches and goal markers. This would represent about 80% of GCV’s gambling revenue in the country until 2021.
While the State Treaty establishes a monthly betting limit for customers of € 1,000, it considers that this rule could be slightly relaxed. Likewise, is optimistic about continuing to provide its iGaming products, despite the Regional Council’s warnings to operators about the obligation to close casino product operations, after receiving a license.
The financial balance of a net income increase of 23% year-on-year in the German gaming operation during the first quarter of 2019, leads the operator to think that with these results it will be able to mitigate the 5% turnover tax that will be implemented.
Instead Regulus Partners has a different opinion. The gaming industry consulting company believes that if the State Treaty is strictly enforced in Germany, operators will see their income disappear between 40% and 70%.
Perspectives in other markets
The English operator, however, continues to look at other markets in search of better operating prospects such as Brazil, where there is great potential for growth and recently the government initiated a consultation that will conclude on August 31 on a regulatory framework that bets red sports.
In other difficult markets such as the Dutch, GVC also hopes to obtain a license when the award process begins in 2021. All this despite the fact that its leading brand Bwin was fined €350,000 at the beginning of the month by the Dutch regulator Kansspelautorteit.
GCV stated that it intends to pay this fine although
“it strongly disagrees with the basis on which the sanction decision has been made and reserves its rights to dispute the fine in the future.”
On the Italian Dignity Decree, which establishes restrictions for gambling advertising, the operator describes it as a threat
“less than expected under a general ban on advertising.”
“The group’s brand portfolio in Italy (Eurobet, bwin, Gioco Digitale) is very well established and, in combination with the Eurobet Retail property, which offers a perfect multi-channel solution, is expected to surpass the market in the second half,” added.
In relation to the United Kingdom, the operator showed favorable financial results in the first half, exceeding all expectations. From April 1 the maximum bets of B2 gaming machines in the UK were reduced to £ 2l.
While on the use of credit cards for gambling, its impact will be minimal on the income of the gaming company, because according to a consultation of the Gaming Commission, plastic represents only 6% of the deposits of the players.