Exclusive: Codere injunction to delay Sportingbet dot.es launch
Operator yet to secure court date to get injunction overturned " political uncertainty harms Russian JV and Greek operations.
Sportingbet’s Miapuesta brand could miss out on as much as two weeks of revenues from the Spanish market as the effects of March’s injunction imposed by Madrid’s Commercial Court lingers on.
While the operator does not expect to have any issues in having the injunction eventually overturned, it still needs to secure a court date upon which the judge responsible for imposing the shutdown can lift it.
Consequently Miapuesta could miss out on as much as two weeks of revenues following the issue of licences on Friday, including the first week of games at the Euro 2012 football championships.
The injunction was brought into force in February this year, on the basis that by operating before being awarded a licence, Sportingbet was operating illegally in Spain. As a result in the operator’s Miapuesta.com and dot.es sites were shut down before the company paid a 2m bond to have them reactivated pending an appeal in February. However, an appeal by Codere saw the injunction upheld by the Commercial Court in March, prompting Sportingbet to announce its intention to mount an appeal.
Chief executive Andy McIver told eGaming Review:”The injunction did say that it was subject to us having a licence, so our understanding was that once we got a licence the reasons for the injunction would fall away.
“However we do have to go back to the judge and we have to get time in that court, so the legal advice we’re getting says it will be a couple of weeks,” he added.
McIver compared the potential red tape to the 15-day black period initially proposed in the Spanish regulatory proposals and since removed from the measures, and noted that “We’re running at about £2m a month give or take seasonality, [but] we’d be running into the Euros, and obviously Spain are favourites for the tournament, so we’d be losing out on a higher revenue period.”
He revealed that the injunction had “cost us quite dearly”, contributing to the 20% decline in revenues reported in today’s third-quarter results, but noted that “We also had the unexpected Spanish tax [the 17.2m back-tax outlay] in the middle of it all – our job is to manage with what we’ve got and we’ve got to get on with life once that’s happened.”
When asked about a potential counter-claim against Codere, McIver said “We’ll keep our options open, but it’s not really something we’ve concentrated on. We spent a lot of time fighting the injunction but once it was granted we decided we needed to get ready for regulation and move on and try to get it lifted as fast as we possibly could.”
Meanwhile Sportingbet’s Russian joint venture with local partner Liga Stavok, originally signed in November 2010, was said by the CEO to be “Treading water” and “on the back shelf” following political changes in the country.
“They backpedalled very heavily following a change in the Russian political climate, and that climate doesn’t seem to have changed,” explained McIver, adding that “I think they feel at this point in time putting up an internet site could be inflammatory even though they have a licence.
“I have no idea how long it will take and I don’t think they know either. That’s disappointing but we’re a young industry – we’ve only been going 14 years, and if you don’t try you don’t get: some you win, some you don’t,” he continued.
Political uncertainty has also stood in the way of Greek regulation, with McIver explaining: “I think we need a bit of stability in both of those before they pick the gaming legislation up again,” although the operator’s entry into the Danish market has begun to reap rewards with CFO Jim Wilkinson telling eGR “Denmark is about 3-4% of group revenue – it’s nice, it’s solid and it’s improving each month, and I think regulation is settling down in that country and customers are getting used to it as much as operators.”
The main growth in Q3 came from Australia, where McIver says the integration of Centrebet – acquired last summer – is “Going very well and to be quite frank better than anticipated,” and should be completed by the end of June.
“The Australian economy is looking slightly more rosy than the European one, and there are government moves to perhaps introduce in-play betting in Australia in November, which would be very welcome,” added the chief executive, who also remains optimistic about the migration of Centrebet onto the Sportingbet mobile platform.
“We currently have about 25% of our business on mobile and theirs is about 15, so we hope to see a bit of uplift there as well,” he explained.
The ongoing review of Australia’s Interactive Gambling Act (IGA) could – as well as the regulation of in-play – bring about a five-year trial of online tournament poker.
Analyst Ivor Jones of Numis retained his firm’s ‘Buy’ recommendation, saying: “The Australian business, fully regulated and accounting for practically all the group’s profits this quarter, continues to blow the lights out and there is news of possible positive regulatory change.”