Mybet predicts loss due to German uncertainty
Operator to pursue cost-cutting strategy to mitigate the impact of regulatory difficulties in Germany
Schleswig-Holstein-based operator mybet has slashed its earnings projections for the year in the wake of increasing regulatory uncertainty in Germany and said marketing costs will be “drastically reduced”.
The company’s management board has downgraded its EBIT forecast for the 2013 financial year from at least 2.5m to between minus 1m and 0m, with the firm looking to offset regulatory concerns through an extensive cost-cutting strategy.
“Although the revenue performance of the mybet Group remains positive compared with the industry, the management board has launched a cost-cutting programme to counter the negative impact of the betting tax and the loss of French activities,” the operator said in a statement.
“For example marketing costs are to be drastically reduced in the second half and all commission agreements with partners reappraised. In the personnel area, a saving of 1.5 million per year is being targeted,” it added.
The German operator has previously said it expects to receive a federal sports betting licence, despite criticising aspects of the legislation as being “misleading and contradictory”. Industry lobby group the European Gaming & Betting Association (EGBA) has also been critical of the First Amendment to the Interstate Treaty on Gambling, saying the regulatory plans were “set to fail”.
The mybet announcement follows the release of its results for the first six months ended June 2013, which showed a small rise of 3% in net gaming revenue to 34.9m driven largely by the firm’s casino and poker verticals which rose 25% to 12.4m. Sports betting also increased by 5.4% but the company’s lottery offering fell sharply by 53.9% to 1.8m, compared to 4m in the same period last year.