DOGA calls for reforms after Ladbrokes Danish exit

Ladbrokes’ exit from the Danish market highlights the need for the regulator to act to level the playing field including splitting up Danske Spil and fighting back against the black market, according to the head of the Danish Online Gambling Association (DOGA).

Speaking to eGaming Review, Morten Rønde said that state operator Danske Spil’s dominant position is making it tough for operators to prosper in what is a “very fierce, competitive situation”.

“[Ladbrokes’ exit] shows that it is not as easy to make money on the Danish market as the authorities say,” Rønde said.

“14% of the market is black and then you have one operator, Danske Spil, capturing 54% of the rest of the market. It means there is a limited market for the remaining operators. It leaves us with a very fierce, competitive situation,” he added.

Ladbrokes cited “unsatisfactory” profits when announcing its departure with immediate effect yesterday, adding that decision was due to the market having failed to live up to early expectations.

Rønde said that the departure of Ladbrokes, which was a member of DOGA, does not neccesarily sound the death knell for operators in Denmark, pointing to the market’s “significant growth” in 2013 and 2014.

But he said the Danish Gambling Authority (DGA) should be looking at splitting Danske Spil’s lottery and betting operations, as well as making it illegal to take bets from Danish players without a licence, if it wants to ensure the long term sustainability of the market.

“I don’t think marketwise Ladbrokes’ departure will affect other operators immediately but others could be in a similar position. Ladbrokes is the first of the bigger operators to leave the market,” Rønde said.

Peter Weinreich, managing director of Betsson Denmark and the newly elected DOGA chair, said that three-and-a-half years into the regulated market was a natural point for operators to re-evaluate their position in the market.

“We are sad to see Ladbrokes exiting the market as they have contributed to the discussions about market regulation in the past, but it’s a mature decision to focus elsewhere if they aren’t succeeding in Denmark,” Weinreich said.

“So far we have seen few licensees withdraw, but Ladbrokes won’t be the last one. Effective taxation is around 22-25% and not many operators deliver a profit margin on that level, so profitable business on the Danish market is a challenge,” he added.

Weinreich said that Betsson was “very much aware of the challenges in the market” and was confident it had the “structure and strategy in place to win market share”.

Meanwhile the challenge of Danske Spil’s dominant market position could come under scrutiny after Denmark’s liberal Venstre party formed a government following last month’s election.

Venstre had previously expressed a preference for privatising parts of Danske Spil, although the MP most outspoken on the subject, Mads Rørvig, was not returned during June’s vote.

Nonetheless it is understood that there is general sympathy for privatisation, which could raise around £385m, across several sections of Denmark’s parliament.