Betsson revenues could drop 15% in potential Dutch cooling off period
Analysts call Dutch market a “lose-lose scenario” for Swedish operator
Betsson could see as much as 15% of its revenue wiped out if Dutch politicians implement a two-year cooling off period on operators who have previously targeted the Dutch market, according to analysts at Berenberg.
Berenberg said the operator could lose 15% of its revenue over the next two years and between 30-40% of its EBITDA if it is barred from applying for a Dutch egaming licence.
“The Netherlands is a lose-lose scenario for Betsson,” Berenberg noted. “In the event of a cooling-off period being implemented, it is extremely likely that the company would be affected, in our view…. Even if this does not happen, Betsson’s gaming tax burden will increase significantly once the law is implemented, something that we do not think is fully accounted for in consensus estimates.”
Licenced operators would face a 29% tax rate on GGR.
In last week’s Q4 earnings call, Betsson Group CEO Pontus Lindwall played down the likelihood of off a cooling off period, saying: “There has been discussions of cooling off periods in many different countries, but its never made it into regulation, and I don’t think we will see it in this country [the Netherlands] either.”
He added: “If it happened it would hit all international operators the same way. That would probably not be very good for the development of the Netherlands market.”
Senators in the Dutch parliament are due to vote today (Tuesday) on whether to pass the Remote Gaming Bill, with Berenberg saying there is “virtually no risk to the law not being passed”.
Although the cooling off proposals have not been directly included in the bill, Dutch Minister of Justice Sander Dekker recently confirmed in his written responses to senators that this was one of the measures on the table.
Betsson’s Corona subsidiary was fined €300,000 by the Dutch Gaming Authority (KSA) in August following an investigation which revealed it was offering gaming to customers in the Netherlands without a local licence. The operator later said it would appeal the fine.
According to reports in the Financieele Dagblad newspaper, as many as 300 egaming operators have expressed an interest in operating in the new Dutch market should the Remote Gaming Bill be passed.
The newspaper estimates that over 50 operators could submit formal applications to the KSA following a successful vote.