EGR Power 50 2021: 8. Tipico
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8. Tipico (6)
FINANCIALS: After opening its books to BDO, the accountancy firm noted a solid financial performance for Tipico during the 12 months to the end of July
STRATEGY & IMPACT: Tipico’s in-house, betting-led product is supported by high-profile sponsorships and 1,200 retail outlets across Germany and Austria for omni-channel efforts and amplifying brand awareness
GEOGRAPHIC REACH: Germany remains its core market, as does neighbouring Austria. The operator has also entered the US with initial launches in Colorado and New Jersey, albeit with limited success up until now
INFLUENCE & LEADERSHIP: Despite all the regulatory challenges in its principal market, Tipico is still the clear leader in Germany, both online and offline
When you are as heavily exposed to Germany as Tipico finds itself, regulation of online gambling in Europe’s largest economy was bound to have a meaningful impact one way or another on your business. As it turned out, the regulations there, as part of the new State Treaty on Gambling, have made it Europe’s most punishing regulated market, particularly on the igaming side with rules like a €1 cap on spins, a practically unworkable 5.3% turnover slots tax and, more importantly, the €1,000 monthly deposit limit. It’s a black market’s dream scenario.
While the financial performance of Tipico is off limits due to the business being privately owned, the difficulties presented by the German market, including during its transitional phase, will have taken their toll. Indeed, BDO, which was privy to Tipico’s online revenue for the 12 months to the end of July, scored the Malta-headquartered operator slightly down on the financial rankings league table compared with the fourth place the firm achieved last year.
Nevertheless, Germany is what it is and Tipico – majority owned by CVC Capital Partners since 2016 – is still the market’s leading online operator, especially when it comes to sports betting, with unparalleled brand recognition among Germans thanks to strategic partnerships with football leagues and clubs. Its in-house tech platform is another competitive advantage. Elsewhere, Tipico is attempting to make it in America with its sportsbook and, more recently, online casino with dedicated mobile apps in the highly congested and maturing New Jersey market via its partnership with Atlantic City’s Ocean Casino Resort.
In August, Tipico was given the green light to launch in another competitive state, Colorado, with sports betting. In fact, the firm later announced plans to open a tech hub in the Centennial State and create around 440 jobs encompassing software development, cloud infrastructure and data engineering.
In addition, a 10-year access arrangement was inked with Caesars Entertainment for Tipico to enter Iowa and Indiana, while a deal with USA Today publisher Gannett means the operator is the news outlet’s exclusive sports betting and igaming partner for the next five years across 450 websites. Headed up stateside by US CEO Adrian Vella, Tipico seems determined to buck the trend of European betting brands struggling to make much of an impact in the US. It’s a tough ask, sure, but it would be foolhardy to underestimate this German giant.