iGaming
Greek online gaming law more
palatable DEREGULATION L
ast minute changes to the law deregulating online gaming in Greece have
gone some way to address- ing the concerns of the Euro- pean Commission, but have included a provision to claw back taxes from operators who serviced the market from the beginning of 2010. The law has also scrapped plans for limiting the number of online licences available and has also consigned to the bin a proposed six month ‘blackout’ ahead of the imple- mentation of any new laws where only OPAP would be able to operate online. Instead of the blackout, a transitional period will see any EU-licensed operators able to do business in Greece, albeit with a 30 per cent GPT and a 10 per cent tax on win- nings for players. Afterwards any licensed operator will have to locate their servers in Greece.
Bwin.party co-CEO Jim Ryan said it was too early to comment on the situation: “The law that was passed is very broad and generic. A lot of the detailed decisions are left to the various ministries. On the tax matter, in the context of the European market, the structure seems inappropriate. The law itself has not been approved by the European Commission, so all that leads me to back my initial comment that it’s too early to determine what that means for our business.” Comments made by Greek finance minister Evangelos Venizelos also suggests that the government isn’t plan- ning on selling off its 34 per cent share of OPAP any time soon, despite it seemingly being a part of the country’s bailout agreement, and that the government is actually planning on using more laws to strengthen the operator’s position. Venizelos said: “This isn’t a decision we are making now. The cabinet and privati- sation committee, on the basis of estimates from our international consultants for the value of OPAP, will make the best decision for the public interest and for the reduction of public debt. We will enhance OPAP and after we will see what the best way to exploit the asset is.” Part of this appears to be giving OPAP an exclusive licence to operate 35,000 video lottery terminals, with a requirement to sub-con- tract half these out, but such a move might be contrary to European state aid rules.
GVC eyeing up Sportingbet’s Turkey
Just as GVC is diversifying away from Germany, a Turkish delight appears in the form of Sportingbet. MERGERS
G VC Holdings,
owner of the CasinoClub, Betaland and Betboo brands, is
weighing up a bid for Sport- ingbet’s Turkish business as the latter attempts to posi- tion itself for an approach by the risk-averse Ladbrokes. GVC’s interest would con- stitute a reverse takeover under AIM Rules, as at around £50m the Turkish business is actually bigger than the £35m valued GVC, so GVC has suspended its shares ‘pending publication of a re-admission docu- ment’. The firm told the stock market that it is in exclusive discussions with Sportingbet regarding the possible purchase of the Turkish language website business and added: “These discussions are at a prelimi- nary stage and there can be no certainty that they will be concluded successfully. A further announcement will
be made in due course.” Such a move would be of interest to GVC which is looking to diversify its inter- ests given that a material part of the revenues and profits are derived from Germany, where the draft State Gambling Treaty threatens to prohibit the acceptance of wagers from online casinos offered to German residents.
In its last trading update, GVC reported a perform- ance ‘broadly in line with expectations’, with Net Gaming Revenues for the first half of the year up 8 per cent to 30.3m euro (£26.6m). The group said it had seen an encouraging perform- ance from its Betboo brand, showing strong growth in NGR and further expansion into emerging markets. NGR from CasinoClub has also improved, but its profit con- tribution is reduced, reflect- ing the cost of TV marketing. The firm said: “Overall,
NGR in H1-2011 was 13 per cent higher than in H2-2010 and 8 per cent higher than H1-2010 which itself bene- fited from the FIFA World Cup. Most notably there has been a 62 per cent increase in the value of sports stakes in H1-2011 over H2-2010 arising from the growth in the group’s emerging markets brand.”
GVC said its TV marketing campaign in Germany for CasinoClub had mixed results: “Whilst the campaign was successful in reactivat- ing lapsed customers leading to a recovery in Casino rev- enues to above those earned in H1-2009, its ability to gen- erate active new players was more limited. Contribution was impacted by the cost of the marketing campaign, and the continuing increase in the proportion of new busi- ness sourced through affili- ates. As a result the contribution margin for the period fell to 50 per cent as
compared to 62 per cent in H1-2010 and 58 per cent in H2-2010; we anticipate as the benefits of this marketing expenditure come through, margins will improve again.” The firm has also been aggressively marketing Betboo, but in Latin America so as to achieve a step- change in the revenues ahead of the 2014 FIFA World Cup in Brazil.
In the meantime, Sport- ingbet has revealed that the trends experienced during the previous nine months of the year have continued into the final quarter. It com- mented: “Challenging eco- nomic conditions in some of our European markets have resulted in an increased focus on cost control. Our Australian and emerging markets businesses con- tinue to demonstrate the benefits of the group’s geo- graphic diversity with resilient performances throughout the year.”
‘Sun shining’ for Probability after move to Gibraltar
The firm may have made a costly move to the Iberian peninsula, but Probability believes that mobile gambling is about to take off. MOBILE
M
obile gambling opera- tor Probability has said that it welcomes the UK government’s review of the regulatory framework for offshore remote gambling, at least ‘in principle’. Speaking at the firm’s audited results for the year, which saw a 14 per cent increase in net gaming revenues to £5.37m, chairman Graham Parr said that it could be a positive move.
He commented: “Any- thing which brings certainty and reduces the threat from unregulated operators is a good thing for the industry generally, and would strengthen our position in a consolidating market. It is apparent that in the long term, Europe’s single market will, for gambling at least, be more a patchwork quilt of regulations and taxes. Probability is one of the new breed of businesses which was created with the technology and structures necessary to thrive in such an environment.”
Despite the increase in 4 BettingBusinessInteractive • SEPTEMBER 2011
NGR, the firm posted a loss of £1.1m before tax, a large part of which was a relocation to Gibral- tar from Alderney and the subsequent restructuring which cost around £700,000. CEO Charles Cohen said that the company has been laying the foundations for it to make substantial advances and that these are now hap- pening. He explained: “Invest- ing in the core tech- nology and securing the regulatory posi- tion of the business have been our first priorities, goals which we have met in budget and on time. We have prudently expensed all of the costs of this invest- ment (such as the move to Gibraltar, the restructuring of the group after the con- clusion of the technology investment project). “The next phase is a plan
through an issue of equity to mostly new investors to help fund future growth plans including international expansion.”
Parr said the firm has now concentrated on pushing its consumer and business-to- business revenues back into gear, which included the launch of product services for iPhone and Android devices in late August 2010.
SMARTPHONES HAVE BOOSTED MOBILE GAMING
for rapid growth in both rev- enues and margins, with increased consumer and wholesale (B2B) services. In October 2010, we raised £2.3m after expenses
He added: “We intend to maintain a very close watch on operational and mar- keting returns, whilst expanding our core direct-to-consumer and business-to- business services. Investment in technology (software and hardware) is on-going but will not require significant increases in capital expenditure or over- head on current plans. We are also actively pursuing opportunities in new markets, and recently
announced a deal with Caliente for Mexico. Italy is also on our horizons.” Commenting on the results, Cohen said: “We made real strides this year, generating operating profits in the last quarter as we enjoyed the first bene- fits of lower operating costs following our move to Gibraltar and increasing our customer acquisition for LadyLuck’s - the group’s primary UK facing brand. Smartphones have also made a huge impact on our business this year, helping to turn mobile from a niche to a mass market opportu- nity.
“Going forward, our monthly fixed overheads in the UK and Gibraltar are significantly lower than they were a year ago. Com- bined with additional margin improvements in our trading activity, our business model is stronger than ever. With consumer appetite for smartphones and mobile services seem- ingly insatiable, the sun is shining for us.”
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