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Compliance pressures in the European online gambling market are beginning to take its toll.
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LeoVegas, one of the largest of the online casino operators, saw its share price fall by nearly one-quarter. The company warned of the increasing costs tied to regulatory compliance.
From CalvinAyre.com:
On Wednesday, the Stockholm-listed LeoVegas reported revenue of €78.6m, a 41% increase over the same period last year, while earnings rose €1.4m to €9m. The surge reflects the company’s UK online casino acquisitions of Royal Panda and IPS (the latter since rebranded as Rocket X) plus the launch of its UK-facing betting brand BetUK. Organic growth was up a more modest 7%.
Company shares dropped 24.2% at the close of Wednesday’s trading. The company did warn that the tightening regulatory compliance, particularly in the UK market, was having “an adverse effect on growth.”
The CA website also noted that the UK Gambling Commission had hit LeoVegas with a £600k penalty for misleading advertising and failing to take “all reasonable steps” in protecting problem gamblers from themselves.
The company offered some positive news in this week's report, pointing out that Sweden's regulated online gambling market is set to open January 1.
LeoVegas anticipates a jump of approximately 60% from locally regulated markets, up from the 35.3% in Quarter 3.
- Aaron Goldstein, Gambling911.com
