888 chief executive Brian Mattingley has cast doubt on the Spanish regulator’s assertion that the country’s regulated online gambling market will be open by this summer.
Mattingley said in this week’s Q1 earnings call: “Spain was due to launch in April this year, it hasn’t launched yet. [888 COO] Itai [Freiberger] and myself visited the new regulator in Madrid three or four weeks ago. They seemed to be in a little bit of confusion out there, so we are not sure when the market is going to open up. They stated at the meeting that the market would be open by the summer. I am not sure how long the summer in Spain is(!)”
Mattingley’s comments follow new Spanish regulator Enrique Alejo confirming at the end of March that decisions on all 59 licence applications may not be delivered until the middle of June. Sportingbet, forced to turn off its Spanish operations by a local court in Madrid, announced around the same time that it still expected to be granted its licence on or before 25 May 2012, while Betair is expecting a court decision on Codere’s action against it in mid-May.
There were however some positives amid the confusion, added Mattingley: “[O]ne thing I did take from that meeting was they were very, very reasonable people. Itai and I came away very encouraged in as much they were prepared to listen to people and to gather ideas as to how the market could best be developed. So in terms of Spain, it looks good, but not too sure when it is going to be available.”
888 is also preparing to submit licence applications for online poker and casino in the breakaway German state of Schleswig-Holstein (SH), the only one of the 16 German federal states or Lander not to sign up to a new Interstate Gambling Treaty under which the other 15 plan to issue no more than 20 licences to private sports betting operators based on a prohibitive 5% turnover tax.
“We see [Germany] as a very strong territory for us, we are pursuing all of the necessary adaptations to become compliant”, said Mattingley.
SH, which is proposing the issue of unlimited licences for all the major products including sports betting, poker, casino and exchange betting, had by late March received six licence applications for online sports betting and one for online casino since the applications were opened on on 26 January. Operators known to have applied there include 888, Betfair, JAXX and bwin and PartyPoker brand owner bwin.party digital entertainment.
Mattingley added that the company hoped to have reached break-even point in Italy by the end of 2012. “At the moment, we have circa 6% market share, which we think is very respectable, considering the market leaders will always be the state-owned lotteries. But our revenue in Italy is still below what it was before we pulled out ready for licensing, and it’s true to say we are not profitable at this moment in time in Italy, but we would like to think by year end we are reaching break even.”
The 888 CEO, appointed on a permanent basis last month, was speaking following the company unveiling a 25% year-on-year increase in revenue to USUS$94m, driven by 88% and 26% uplifts in poker and casino respectively.
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