Sportingbet lines up Greek/Spanish licences
Applications for licences in two soon-to-be-regulated markets signals willingness to move towards a dot.country model.
Sportingbet will apply for licences in Greece and Spain in a bid to maintain its leading position in those markets, suggesting a move towards a dot.country business model in the next year, the company’s chief executive has told eGaming Review.
Following the operator’s first half and Q2 results for the three months to 31 January announcement this morning, Andy McIver told eGaming Review that Sportingbet would look to retain its position as market leader in those markets once regulatory processes are completed later this year. Despite the two European countries suffering economically they are among the listed company’s core markets along with Australia. Greece provides Sportingbet with 15% of its net gaming revenue.
“We haven’t pulled out of Australia since it was regulated in 2008. We were the market leader before and we’re still the market leader now,” he said. “Regulation in Greece and Spain looks to be coming soon and these are also places where we’re a market leader, so we’re applying for licences there too.”
A note from advisors Peel Hunt this morning said the economic situations in Greece and Spain had lowered sports margins for the operator, but that despite this European sports NGR had still risen 4%. “Management has estimated that under current proposed Greek legislation, the hit to profits in the first year could be £4m, but as with Australia, it would expect to at least recover to historical levels of profits over the medium term”, it said.
Australia was Sportingbet’s star performing market with amounts wagered up 5% and NGR up 73% during the second quarter. Sports margin in Q2 was 5.4%, compared with 3.3% in 2010. Its emerging markets division performed well, particular in South America with NGR up 67%.
Like-for-like amounts wagered in Europe” taking out the markets exited by the company “in its second quarter are up 25%, with Eastern Europe shrugging off the effects of the recession.
The last year has also seen Sportingbet withdraw from the French and Norwegian markets, the former due to prohibitive taxes and the latter because it would have been illegal for them to continue to operate, but McIver is satisfied that the absence from these markets will not have a long-term negative impact. “In France we were only number 10 anyway and the taxation system makes it difficult to operate there “ just ask the likes of Betclic,” McIver, said. “Norway provided less than 1% of our net gaming revenue, plus of course it’s illegal and that’s the real reason for us pulling out.”
Overall, Sportingbet saw a 36% drop in amounts wagered on poker in Q2 offset by an increased sports betting take, leaving overall amounts wagered up£53m compared to the corresponding period last yearfrom £502.3m to £555.3m.Poker only accounts for 6% of Sportingbet’s business.
The growth in sports betting was helped by the rise of the company’s mobile platform “ launched only nine months ago in many jurisdictions “ and a 27% growth in in-play betting, which now contributes 67% of European sports revenue.Sportingbet’s mobile phone products now accounts for 10% of its active customers.
“Our goal in the last four years or so has been to offer people something to bet on every hour of every day and our yield per active sports customer has been increasing every quarter,” said McIver.”Football is still the most popular but basketball is growing in popularity, and particular growth areas are Russia and Eastern Europe.”
He said Sportingbet is on schedule with its Russian strategy, following on from the joint venture with Liga Stavok which was confirmed last November.”
McIver added there had been no progress towards any further mergers or acquisitions in Europe since talks with Unibet broke down late last year, explaining that no approaches had been either made or received on that front.