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GVC welcomes German Tolerance Policy despite expected EBITDA hit

1st October 2020 11:48 am GMT
GVC Holdings
Sportradar

London-listed gaming operator GVC Holdings expects new online gaming regulations in Germany to reduce next year’s EBITDA by as much as €70m.

GVC said Thursday that it welcomes the German Tolerance Policy, which was agreed last month and will allow operators to continue to offer most of their products in the market under rules contained in the new State Treaty on Gambling, which will regulate the market from July 2021.

The company said that the Tolerance Policy will effectively bring forward and implement many parts of the state treaty, providing clarity and certainty for GVC in the German market.

From October 15, online operators serving the German market will be required to withdraw all casino table games until they are authorised on a state-by-state basis under the new treaty, and to implement €1,000 per month deposit limits across poker and slot games.

The Tolerance Policy also introduces restrictions on parallel play on slots and autospins, certain in-play sports betting markets, and advertising of poker and slots games.

From December 15, operators will also have to impose a €1 per spin maximum stake on slots, as well as 5 second minimum duration for a slot spin.

GVC said that the changes will not have a material impact on EBITDA expectations for the current year, although they will likely reduce EBITDA by approximately €70m next year.

“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,” said GVC Holdings chief executive Shay Segev.

“The establishment of a level playing field for responsible, licenced operators is ultimately good for German consumers, the Group and the industry as a whole. It also re-enforces our position as the most globally regulated and responsible operator in our industry.  We look forward to building on our market leading offer in Germany and providing our customers with the very best gaming experiences under the new regulatory framework.”

Shares in GVC Holdings plc. (LSE:GVC) were trading 2.16 per cent lower at 953.00 pence per share, less than 10 per cent off their 52-week high of 1,023.50 pence per share set on Wednesday (Sep. 30).

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