Unibet has signed a strategic partnership with Rank Group to offer online casino and poker in Belgium.
CEO Henrik Tjärnström said the launch in the third quarter, subject to approval by the Belgian Gaming Commission, was “encouraging” and would allow the company to consolidate its “No 1 position in the market…estimated to be around the size of €140m by independent analysts for 2013.”
Unibet’s new partner Rank operates two land-based casinos in Belgium, which has so far restricted online permits to licensed land-based betting and gaming entities in the country. Unibet, which launched its dot.be sportsbook on 11 July, is one of only two pan-European online operators to secure licences in the EU Member State. PokerStars launched on a regulated basis back in 2010 via its partnership with Belgian casino owner Circus Groupe.
Tjärnström highlighted that Belgium, while not a huge market, was one of the most profitable dot.country tax frameworks for operators, given the high tax rates in France, Italy, and Spain.
“It’s an environment where all products are allowed, and it’s an 11% tax on gross winnings revenue, one of the most favourable tax rates in the re-regulated markets in Europe”, he said in the company’s Q2 earnings call this morning.
Unibet’s entry into regulated territories, not just in Belgium but also in France, Denmark and Australia, however saw its betting duties in these markets in the first half of 2012 rocket to £5.7m, from just £0.6m a year earlier. Analyst Simon McGrotty of Davy Stockbrokers pointed out that: “With a still very low percentage of revenue untaxed, Unibet could find it difficult to grow earnings over the coming years. This is consistent with our view on bwin.Party and Betfair.”
Tjärnström however said he was confident the company’s three recent acquisitions securing their position in regulated markets – Solfive in France in December 2011, Betchoice in Australia in February 2012 and Bet24 in Denmark in April 2012 – would “each provide a step change towards fully regulated revenues, and in time when we can grow those businesses and provide scalability, they will also become fully regulated profits for the company.”
The company today unveiled year-on-year revenue growth of 34% to £96.5m for the first half of 2012, on the back of “good organic growth combined with M&A activity”, acording to Tjärnström. Pre-tax profit for H1 was £18.1m, marginally up on the £18m achieved in the prior year.
The revenue performance was driven by a strong sports betting margin in the second quarter, “a clear outperformance compared to the market generally” according to the Unibet boss, who attributed this to “world-class risk management” across its own sportsbook and Kambi B2B platform, and also to Unibet being a “well diversified and pan-European operator”. The latter’s impact was seen “especially for the European Championships” said Tjärnström, where Unibet achieved a combined margin of 11.1%, generating £3.6m in gross win off £32.6m turnover during the event.
H1 betting revenues were up 58% year-on-year to £43.7m, casino revenues by 27% to £37.7m and poker by 11.5% to £7.7m. The company said it had been “encouraging to see a positive turnaround for Unibet poker revenues in the middle of the second quarter”, achieved by an “aggressive reactivation initiative” and “a new loyalty system in Fast Poker”.
Western Europe was the strongest growing geographic segment during the last quarter, correspondingly increasing its share of group revenue to 34% from 32% in Q1, and 27% in the comparable quarter a year earlier. The Nordics accounted for 53% in the last quarter, stable on Q1 but down from 59% in Q2 2011.