Germany Allows LeoVegas to Operate Nationwide Online Slots Legally
Online gaming operator LeoVegas stands to make significant strides in the market following the latest licensing approval by the German Joint Gambling Authority (GGL). The newly acquired license allows LeoVegas to deliver and promote online slots throughout Germany.
The GGL granted a license to the LeoVegas subsidiary LVSports Limited, permitting the company to provide slots and marketing services to all 16 German states. Notably, this approval marks a significant step since MGM Resorts International acquired the company last year.
Germany enacted the Fourth Interstate Gambling Treaty, hoping to streamline online gaming across the country. However, certain states have used this as an opportunity to opt out of online gambling altogether, limiting its expansion compared to initial expectations. The market predominantly features online slot machines, although online poker is gradually gaining traction.
LeoVegas Steps Up
The GGL assumed control in early 2021, consolidating a fragmented regulatory landscape for gambling activities.
However, not all German states have welcomed the country's transition to online gambling. In mid-January, for instance, Mecklenburg-Vorpommern leaders contested the arrival of the GGL and online gaming in general.
State Chairman ReneΜ Domke argued that compliance with the GGL is voluntary for states, and the implementation of unified gambling regulations doesn't necessitate individual states to allow online gambling by default. This potentially poses challenges for LeoVegas as it capitalizes on its new license.
Responses to requests for comment for this article were not received before publication.
LeoVegas Struggles with Revenue
Following the acquisition by MGM Resorts, LeoVegas experienced minor growth in gross earnings, reporting a 1% increase in the fourth quarter of last year. However, the company also suffered an operating loss of β¬2.5 million ($2.7 million), compared to a profit of β¬6.1 million ($6.5 million) in the same period the previous year.
The primary cause of the loss was a sharp rise in operating expenses, which increased year on year by 56%. Personnel and tax costs contributed to higher operating expenses, resulting in a β¬16.5 million ($17.7 million) drain on the company.
With the new license in Germany, LeoVegas aims to recreate the success it has seen in other European countries, such as Spain and Sweden. First, it must navigate the challenges posed by those German states that are wary of online gambling.
