Schleswig-Holstein question dominates bwin.party pre-close
Operator notes uncertainty in German state, where it recently received a poker and casino licence.
Bwin.party reinforced its insistence that any future regulation of the German egaming market “Must be in a consistent and coherent manner in-line with EU law,” the operator announced in its pre-close trading update.
Noting that trading since 30 September has been in line with company expectations, with the full-year EBITDA margin anticipated to lie between 19.5% and 20.5%, the operator turned its attention to Schleswig-Holstein, where last month it was among the first wave of operators to be awarded an online poker and casino licence.
Responsible for an estimated 21% of bwin.party’s revenues, Germany is the operator’s largest single market and analyst Ivor Jones of Numis issued a ‘Buy’ recommendation, noting: “If Germany catches up with its neighbours bwin.party should thrive.”
Schleswig-Holstein had sought to abandon its own licensing regime in favour of a return to the country’s State Treaty. The federal solution excludes all verticals other than sports betting from its regulatory regime and proposes to limit the number of licences awarded.
This week saw the expiration of the standstill period for the European Commission to review changes to legislation in the German Land, following last month’s damning opinion from the EC, which received support from lobby group the European Gaming and Betting Association.
However bwin.party, which also holds a sports betting licence in Schleswig-Holstein, believes the deadline passing does not represent anything as clear-cut as giving the region carte blanche to fall in line with the rest of Germany.
The operator explained in a statement: “There is now a question over how the existing regime in Schleswig-Holstein can co-exist with the alternative system proposed by the other 15 Länder,” adding “Despite the recent detailed opinions and the possible threat of a formal infringement procedure, Schleswig-Holstein may choose to press ahead with the revocation of its existing law and its accession to the framework proposed by the other 15 Länder.”
Furthermore, bwin.party applied for a German sports betting licence in August despite maintaining at the time that the country’s regime was non-compliant with EU law. Co-CEO Norbert Teufelberger, who will take sole control of the business when Jim Ryan retires next week, has continued to maintain that the operator’s German-facing casino and poker offerings are legitimate.
Jones explained in his note this morning “We believe that Germany is on course to regulate in an operator-friendly way and this note discusses the, potentially material, positive impact on bwin.party,” while analyst Simon French of Panmure Gordon also issued a ‘Buy’ recommendation, saying “We do not see how licences already issued can be revoked and therefore we expect bwin.party to continue to offer poker and casino to all German residents as well as seeking to obtain a sports betting licence under the Interstate Treaty.”
Elsewhere in the pre-close update, bwin.party noted that its Belgian partner Belcasinos is “In the process of securing the requisite operating licences to operate all online products.”
The Partouche subsidiary agreed a deal with the operator last month, with bwin.party claiming to have put its differences with the Belgian Gaming Commission behind them.
Bwin.party had previously seen a number of its domains blacklisted in the territory, before being embroiled in a legal dispute with the BGC and later seeing Teufelberger detained and questioned in the country’s capital Brussels, however the Belcasinos agreement saw the BGC begin the process to remove the domains from the blacklist, while bwin.party dropped its appeal in the legal case.