BUSINESS

Danske Spil posts record profit despite falling gambling revenue

TAGs: Danske Spil, Denmark

denmark-danske-spil-gambling-revenue-2019Denmark’s state-owned gambling business Danske Spil reported record results in 2019, while the nation’s gambling regulator continues to help fend off internationally licensed online competitors.

Danske Spil reported revenue of DKK5b (US$745.6m) in 2019, a decline of 1.6% from 2018’s result. The mainstay Danske Lotteri Spil lottery unit reported sales falling 3.8% to DKK2.56b, while the Danske Licens Spil online casino and sports betting business saw its sales rise 1.8% to just over DKK2b.

The online gambling business got a boost from last year’s acquisition of the online casino operations of land-based slots operator Tivoli A/S. However, online revenue slowed in the second half of the year following the imposition last July of new online deposit limits.

The Elite Gaming land-based slots unit saw its revenue slip 2.4% to DKK369m and Danske Spil said the expectation is that Elite’s revenue will continue to fall amid a shrinking market. The Swush fantasy sports division had a rough year, with revenue down 46% to just DKK8.8m.

Danske Spil reported a record profit of DKK1.9b in 2019, although that figure was goosed by DKK377m through last year’s sale of the company’s 60% stake in games developer CEGO, which runs the Spilnu.dk online casino. Lottery operations accounted for around 70% of last year’s profits.

Looking ahead, Danske Spil expects revenue and profits to both be lower this year, partly because of the new online payment restrictions, but also due to the costs of launching a new land-based sports betting unit and — oh yeah — the 40% online gambling tax hikes.

Danske Spil recently called on the government to introduce new player protections, citing the rising number of Danes opting to use the Spillemyndigheden gambling regulatory body’s ROFUS self-exclusion programs.

Among the things the company wants to see totally prohibited: advertising during live sports broadcasts, any form of casino advertising, celebrity endorsements, bonus offers, VIP programs and affiliate marketing. Danske Spil also wants to see mandatory loss limits and mandatory ID checks in retail betting shops.

Spillemyndigheden recently issued its annual report on its efforts to reduce the volume of internationally licensed online gambling operators serving Danish punters without Danish permission. With the help of the Danish taxman, Spillemyndigheden examined 502 websites, of which 25 were deemed to be operating illegally and court petitions were filed to compel internet service providers to block their signals.

Spillemyndigheden also celebrated the effectiveness of the country’s regulated online market, which launched in 2012. The regulator says H2 Gambling Capital data indicates that the regulated market accounted for 91.5% of all Danish gambling spending in 2019, up from 72.4% in 2012, and the regulator estimates that this will increase to 93% by the end of 2020.

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