BUSINESS

LeoVegas ramps up fight against Italy’s gambling advertising ban

TAGs: European Commission, Italy, LeoVegas

leovegas-italy-european-commission-gambling-advertising-banSwedish mobile casino operator LeoVegas says its second quarter earnings have exceeded expectations, while the company is ratcheting up its fight against Italy’s new gambling advertising ban.

LeoVegas released an early preview of its Q2 fiscal report this week, happily announcing that its earnings were likely to come in around €15m on revenue of around €87m. The official figures will be released on August 1.

The company said its marketing expenses amounted to around €30m, representing around 35% of Q2 revenue. When LeoVegas released its Q1 report this spring, it said its Q2 marketing spend would likely exceed the 42.3% of revenue the company spent in 2017.

LeoVegas CEO Gustaf Hagman said the company’s “data-driven marketing model works so that we only invest if we see good enough returns in our marketing channels.” This model indicated that the frenzy of rivals’ marketing efforts during the 2018 FIFA World Cup meant LeoVegas “should not advertise in some channels due to the low return, which in turn led to a significantly higher EBITDA than expected.”

LEOVEGAS GOES TO WAR WITH ITALY’S NEW GOVERNMENT
In other LeoVegas news, the company has filed a formal complaint with the European Commission (EC) regarding Italy’s plans to ban all gambling advertising and sponsorships. LeoVegas argues that the advertising restrictions in the Italian government’s so-called Dignity Decree violate European Union rules governing member states’ ability to restrict trade of goods and services.

LeoVegas Italy country manager Niklas Lindahl (pictured), who has verbally sparred with Deputy Prime Minister Luigi Di Maio over the advertising ban, said the company filed its EC complaint because Di Maio “did not want to accept a democratic confrontation” with local gambling industry operators.

Lindahl added that LeoVegas is determined to demonstrate to Di Maio that the advertising ban “does not respect European laws and above all does not protect, but rather exposes” Italians to a greater likelihood of problem gambling behavior by channeling them towards unauthorized online operators.

Regardless of the merits of LeoVegas’ argument, it seems unlikely that the EC will intervene, given that it has effectively washed its hands of interfering with member states’ actions on gambling activity within their respective borders.

Committees in Italy’s Chamber of Deputies are currently sifting through roughly 1,000 proposed amendments to the Dignity Decree, with a vote on the final text scheduled for Tuesday (24), after which the finished product will be forwarded to the full Chamber for further discussion on Thursday (26).

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