GVC To Take 8% Hit To 2021 Earnings From New Germany Betting Curbs

(Alliance News) - Ladbrokes Coral owner GVC Holdings PLC on Thursday welcomed new regulatory ...

Alliance News 1 October, 2020 | 11:09AM
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(Alliance News) - Ladbrokes Coral owner GVC Holdings PLC on Thursday welcomed new regulatory measures in Germany but added that it will take a GBP70 million earnings hit in 2021 as a result.

The 16 German federal states back last month confirmed they had agreed plans to impose a transition-period tolerance policy, tightening gambling regulations in the country. The policies implement many parts of the Interstate Treaty, GVC noted, a legal framework governing gambling in Germany. The Interstate Treaty is penned to come into effect next summer.

The measures, published on Thursday and which come into effect on October 15, will see all table casino games turned off until individual states choose to issue licences under the Interstate Treaty.

The curbs also will limit monthly deposits by customers across poker and slots to EUR1,000 per month but could be raised once licences have been issued. The poker and slot games also must be offered in the German language.

There will be some limits on in-play sports betting.

From December 15, a EUR1 maximum stake per spin will be applied on slot games.

"In complying with the Tolerance Policy, GVC will be well placed for the issuance of sports betting and gaming licences under the Interstate Treaty which is expected to enter into force on 1 July 2021," the company said.

The measures are not expected to materially change GVC's earnings before interest, tax, depreciation and amortisation estimates for 2020, but it is forecast to hit 2021 earnings before interest, tax, depreciation and amortisation by EUR70 million, about GBP64 million. GVC's underlying Ebitda in 2019 was GBP761.1 million, so the hit is likely to be in the region of 8%.

"The introduction of the Interstate Treaty and tolerance policy brings long-awaited clarity to the future of online gaming regulation in Germany. This development is to be welcomed, as is the greater certainty and detail it provides on operating under the new licencing regime," Chief Executive Officer Shay Segev said.

GVC shares were 1.9% lower at 954.50 pence each in London on Thursday morning.

By Eric Cunha; ericcunha@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.

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