Despite financial losses, German operator bet-at-home remained confident in its Q1 2021 trading report due to increased liberalisation of its home country’s market.
Overall, the group’s total betting and gaming income for the first quarter of 2021 was €30.5 million, down 5.5 percent year over year from €32.2 million in 2020.
Sports betting items produced €17.1 million in sales, with the group’s online casino sector contributing an additional €13,282.
Furthermore, EBITDA fell from €9 million in Q1 2020 to €6.9 million in Q1 2020, despite a rise in group equity to €55.3 million from €50.9 million the previous year, resulting in a combined equity ratio of 55.1 percent.
The rise in marketing costs – which totaled €7.4 million in 2019, compared to €6.6 million in 2020 – as well as the introduction of new regulatory standards in German law was primarily to blame for the group’s losses.
Minimised operating expenses
However, bet-at-home was able to minimise its operating expenses to €4.7 million from €5.2 million a year ago, comparable to the regulatory-induced revenue decline.
Thanks to the passage of the Fourth Interstate Gaming Treaty, the operator is also hopeful that the issuance of national sports betting licences starting in Q4 2020 would result in another ‘significant move toward liberalisation’ in the product segment of online gaming.
The Treaty, which was passed last month, secured the consent of the requisite minimum of 13 German states to launch a new federal system governing online gambling operations. Mathias Dahms, President of the German Sports Betting Association, characterised it as “the beginning of a new era of gaming regulation in Germany” (DSWV).
The Treaty will enter into force in mid-2021, and on July 1, 2021, a national licencing scheme for online slots and sports betting products will be implemented.
Furthermore, bet-at-home claims that the federate-level opening of the market for classic casino goods like roulette and blackjack as a result of the recent regulatory reforms would present a lucrative opportunity for German betting operators.
Increased regulatory stability and liberalisation
Although the introduction of these provisions resulted in “significant net revenue losses” in Bet-at-online home’s casino division, the company claims that increased regulatory stability and liberalisation would benefit the company in the long run.
According to the operator: “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.”
The Management Board of bet-at-home expects community gross betting and gaming revenue to fall between €106 million and €118 million in the fiscal year 2021, based on current projections. EBITDA is expected to be between €18 million and €22 million, according to the Board.
Other analysts in Germany’s betting and gaming industry share this excitement, with sales expected to continue to rise, hitting €3.3 billion by 2024.