bet-at-home optimistic ahead of market liberalisation despite Q1 losses

German operator bet-at-home has remained optimistic in its Q1 2021 trading report due to increased liberalisation of its home country’s market, despite recording financial losses.

Overall, the group’s gross betting and gaming revenue stood at €30.5 million for Q1 2021, representing a 5.5% year-on-year decrease from the 2020 figure of €32.2 million.

Of the recorded revenue, €17.1 million was generated from sports betting products, whilst an additional €13,282 came from the group’s online casino sector.

Additionally, EBITDA dropped from €9 million Q1 2020 to €6.9 million, although group equity increased to €55.3 million from €50.9 million the previous year, resulting in a consolidated equity ratio of 55.1%.

Group losses have largely been attributed to an increase in marketing expenses – which amounted to €7.4 million as opposed to the €6.6 million spent on these operations in 2020 – as well as the implementation of new regulatory requirements in German law.

However, corresponding to the regulatory-induced sales decline, bet-at-home was able to reduce its operating expenses to €4.7 million from €5.2 million 12 months previously.

The operator is also optimistic that the awarding of national sports betting licenses since Q4 2020 will lead to another ‘significant step toward liberalisation’, with the product segment of online gaming due to the passage of the Fourth Interstate Gaming Treaty.

Passed last month, the Treaty secured the approval of the required minimum of 13 German states to launch a new federal regime regulating online gambling operations and has been described as ‘the beginning of a new age of gaming regulation in Germany’ by Mathias Dahms, President of the German Sports Betting Association (DSWV).

Coming into force in mid-2021, the Treaty is accompanied by the introduction of a national licensing system for online slots and sports betting products on 1 July 2021.

In addition, bet-at-home believes that the opening up of the market for classic casino products such as roulette and blackjack at the federate level as a result of the new regulatory changes will provide a lucrative opportunity for Germany’s betting operators.

Bet-at-home maintains that although the implementation of these requirements contributed to ‘significant net revenue losses’ in the firm’s online casino segment, improved stability and liberalisation of the regulatory environment will prove to be beneficial in the long term.

The operator stated: “The significantly increased legal certainty and the ability to plan the future development of bet-at-home as an established provider with considerable brand awareness in the core market of Germany outweigh this.”

Based on its current predictions, the Management Board of bet-at-home expects group gross betting and gaming revenue to fall between €106 million and €118 million for the 2021 financial year. Furthermore, the Board expects EBITDA to amount to between €18 million and €22 million.

This optimism has been shared by other observers in the betting and gaming industry in Germany, with the sector’s revenues predicted to continue demonstrating a growth trend, potentially reaching €3.3 billion by 2024.

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