GVC to take 8% hit to 2021 earnings from new Germany betting curbs

GVC Holdings welcomed on Thursday the introduction of the transitional period tolerance policy in Germany.

On 10 September the 16 Lander (German federal states) confirmed that they had agreed to a transitional tolerance policy for the period ahead of the implementation of the Interstate Treaty 2021 with details published today. The introduction of this policy effectively brings forward, and largely implements, many parts of the Interstate Treaty. 

"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," states GVC.

The overall impact of the Tolerance Policy will be to reduce revenue across the German market. With the policy coming into effect through the balance of 2020 GVC estimates that the impact will not materially change EBITDA expectations for the Group for the current financial year. For 2021 GVC estimates that Group EBITDA will be reduced by approximately £70m.

Shay Segev, CEO of GVC commented: “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. 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.”

The key elements of the Tolerance Policy that will come into effect on 15 October 2020 are:

• Switching off all casino table games (eg Blackjack & roulette), until the individual Lander choose to issue licences under the Interstate Treaty
• Deposit limits across poker and slot gaming of €1,000 per month. There may be the ability for these limits to be raised once full licences have been issued
• Certain Responsible Gaming enhancements such as prescribed verification of customer processes and cooling off periods
• All poker and slot games must be offered in the German language
• Restrictions on parallel play on slots and autospins
• Restrictions on advertising of poker and slots games
• Some limited restrictions on sports betting in-play markets
  
  The following elements will come into effect from 15 December 2020:
• €1 max stake per spin on slot games
• 5 second minimum duration of a slot spin