LeoVegas: 81 % Plunge in sales in Germany

On the 1st. July 2021 the new gambling legislation came into effect in Germany. Previously the strict measures introduced to protect the players had aroused lots of criticism. Now it appears, that the new gaming regulation in Germany is having a huge impact on the revenue of the operators.

Two weeks ago the Scandinavian gaming operator LeoVegas published the annual report for the second quarter 2021. Even though the gaming operator achieved satisfactory growth in the key markets, the revenue for the German online market for the same period nearly collapsed entirely. In February of this year LeoVegas had already expressed its doubts publicly on the German gambling legislation.

Restrictive regulations cause a collapse in revenue

The current annual report of LeoVegas showed that in the second quarter of 2021, the operator generated 81 % less turnover than a year before. And this, even though the total turnover of the group, when disregarding the German Market, increased by 3 % in the second quarter of this year – despite the persistent Corona pandemic.

The strict regulations of the new gambling legislation have obviously made many German players turn their back on the regulated operators. The operators, which are still striving to get a German gambling licence, have to face all sorts of problems. Among other things they have to fulfil complex Tech-Rules. Besides this, the fun when gambling has been severely restricted by the new regulations. Among other things one can mention a minimum playing time of 5 seconds, a monthly deposit limit of 1,000 Euro as well as a ban on Autospin. Table games as Roulette and Blackjack are currently completely off-limits for operators with a German licence.

In view of the current market situation it is therefore difficult for the gaming operators to operate lucratively in Germany. The markets in Spain, Italy and Sweden have developed in a much more positive way. The Annual Report of LeoVegas, for example, states:

“The situation in Germany in conjunction with the new regulations with strict product restrictions, an extremely high gaming tax and a contorted competitive situation affects the company negatively. In comparison to the previous year, the turnover in Germany declined by 81 % in the second quarter of 2021 and it made up only 4 % of the turnover of the group.”

Conclusion

Despite the massive decline in turnover LeoVegas considers Germany as an attractive market. The reason being mainly that more than 83,1 Million people live there. LeoVegas specifies in it is current Annual Report, that there are long term great possibilities for the group in Germany, the country being the most densely populated one in Europe. In spite of this, LeoVegas will hold back on its marketing expenses and other investment in Germany. It will be interesting to see, how the turnover situation in the coming quarter will develop. A slump in sales of more than 80 % for gaming providers like LeoVegas will definitely not be tolerable and the company will eventually have no option but to take a different approach.

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