Denmark’s state-run gambling business Danske Spil is taking over the online casino operations of local slots jockeys Tivoli A/S.
On Thursday, Danske Spil announced a ‘partnership agreement’ that will see the state-run company pay a flat fee for the assets of Tivoli’s locally licensed online casino site TivoliCasino.dk.
The agreement also contains a provision under which Tivoli will continue to earn royalties from the online casino’s operations for a 10-year period, with an option to extend if both parties consider it worthwhile.
Financial terms of the deal weren’t disclosed, but Tivoli stated that the agreement meant “the Tivoli A/S result before tax and extraordinary items is adjusted from the level of DKK 100 million to the level of DKK 220 million before tax and after extraordinary items,” implying an expected net benefit of DKK120m (US$18m) in 2019.
Tivoli is one of Denmark’s oldest companies, having been formed way back in 1843. Tivoli runs an amusement park in central Copenhagen which features hundreds of gaming and arcade machines.
Tivoli launched its online casino in 2012 to coincide with Denmark’s liberalization of its online gambling market. A second site catering to international gamblers followed in 2014, but the company shut the international operation in 2016 after determining that the site had “failed to achieve its objectives.”
Tivoli CEO Lars Liebst said Danske Spil was “a strong partner which shares our values, and possesses the qualifications needed to grow the brand further in a highly competitive market.” Danske Spil director Susanne Mørch Koch said the pact “made great sense” because both brands are familiar to Danish gamblers and Danske Spil would take Tivoli’s online casino “to the next level.”
Danske Spil’s 2018 annual report showed the company’s gross gaming revenue rising 8% to DKK5.32b ($799.5m) while after-tax profits rose 6% to DKK1.75b ($262.7m), both record sums. The figures got a boost from last summer’s FIFA World Cup, which generated turnover of DKK878m and resulted in an additional 20k new customers.