GVC bullish on Germany as bwin goes on front foot
Operator says bwin brand will receive additional investment as it battles with likes of Tipico and bet-at-home
GVC Holdings is putting growth in Germany at the top of its agenda in 2017 as the operator looks to ramp-up marketing investment and return the bwin brand to the head of the market.
Speaking following the publication of its full-year results last week, GVC chief executive Kenny Alexander said Germany had been the group’s best performing territory in 2016, and a market where bwin had been able to recoup some of the ground lost in previous years.
Germany contributed around 23% of total GVC revenues in 2016, more than any other market, with the year-on-year uptick estimated at around 11% year-on-year.
The bulk of this growth was the result of increased gaming revenues via the bwin brand, although Alexander said improvements to sportsbook product and risk management also returned notable contributions.
The chief exec also said the firm was in the process of restoring bwin to the position of ‘market aggressor’ following a period of relative inactivity.
He described bwin as “the biggest brand in Germany” and said additional resources would be focused on marketing, which would include increased television exposure in the lead up to the new football season.
“The previous management decided that they didn’t really want to grow the German market – they were worried about regulation and decided they would reduce their investment in that market and became less aggressive,” Alexander said.
“The fact is that while the bwin brand is very strong in mainland Europe, it is at its strongest in German speaking markets. But while bwin retreated, Tipico piled in, bet-at-home piled in, and we continually lost market share.
“We have become more aggressive in the German market and are beginning to recover market share, and the return we are getting on our investment is very good,” he added.
Within its results, the firm revealed marketing investment was set to rise from 17% of NGR in 2016 to 24% this year, and Alexander indicated Germany would receive a healthy chunk of that increase.
Alexander was also upbeat about the regulatory situation in Germany. GVC recently learned it would be one of 35 operators to receive a sports betting licence in 2018, while German federal states are expected to review the potential regulation of gaming verticals later this year.
The likes of Sky Bet are due to enter the market and Alexander said he expected increased competition as the outlook for Germany improved.
However, the CEO said bwin’s history in Germany meant he was confident the opportunities regulation would bring would be greater for GVC than for any newcomers.
“We are regaining market share and bwin is the biggest and most popular brand in Germany,” Alexander said.
“When the market regulates properly people can come in, but we’ve been there for 15, 16, 17 years – bwin is well established, it’s trusted, people know who it is and it’s seen as a German brand.”
He went on: “I’d rather they [Sky Bet] didn’t launch but I’m not losing much sleep about it.
“Sky Bet would probably lose as much sleep as if I was going into the UK with bwin. They are great operators in the UK where they are established, but bwin is well established in Germany, we’ve been there for years and know the market well,” he added.