In Germany, bwin intends to adopt a more assertive approach to sports betting.
Germany's sports betting market is experiencing increasing competition, and GVC Holding, the new owner of bwin, intends to boost investments in the brand. Competing against companies like tipico and bet-at-home, GVC has been rather reserved recently and lost some market share.
GVC's latest earnings report (PDF) highlighted the significance of the German market - around 25% of the company's revenue is generated in Germany. With bwin, which was acquired in February 2016, GVC intends to alter its strategy and rear back to being a dominant force in the industry. The brand aims to heighten its presence and fortify its position against potential competitors.
The bwin brand has a substantial presence across Europe, but thrives the most in the German-speaking markets. However, it has recently lost ground, allowing tipico and bet-at-home to prosper and take more of the market pie.
"We have been slipping - this has allowed Tipico and bet-at-home to grow and we have been steadily losing market share," said GVC CEO Kenny Alexander.
SkyBet, a subsidiary of the Sky media group, could possibly enter the German market, intensifying competition. SkyBet is a highly successful provider in the cutthroat British market. Although its German offering has not yet surfaced, a launch is forecast for this year or in 2018 at the earliest.
Sky's own pay-TV channel could help garner significant attention in a short time span. Although the pay-TV channel no longer holds exclusive rights to live Bundesliga matches since 2016 - some are also streamed on Eurosport - the majority can still be viewed on Sky. The channel could create free advertising space for its own sports betting product, potentially reaching its entire target demographic. Kenny Alexander is aware of the issue, but maintains confidence in his own brand:
"I'd rather they [Sky Bet] didn't open, but I'm not losing much sleep over it. [...] They are great operators in the UK, where they are established. But bwin is established in Germany and we've known the market for years."
Nevertheless, GVC and bwin need to brace for the dawning market scenario. Germany contributes 23% of the Group's revenues, making it the UK firm's most essential territory. The majority of this revenue arises from bwin's sports betting services, which, however, suffered a revenue drop of approximately 30% before GVC's takeover in 2011-2015.
Tougher times are ahead
GVC's main goal is to save money marketing-wise. The advertising budget will soar from 17% of revenue in 2016 to 24% in 2017 and will involve television commercials, among other promotional efforts. Alexander explains in an interview with industry magazine EGR why bwin seemed to remain stagnant in the past:
"The previous management opted against growing the German market - they were wary of regulations and opted to decrease their investment and be less combative."
However, regulatory hassles are now mostly resolved. bwin is not yet licensed in Germany, along with any other bookmaker apart from the state-run Oddset. It's highly probable that bwin will be among the first licensees once the Interstate Treaty on Gambling changes take effect, likely in 2018. A total of 35 businesses will operate under a national license. Consequently, the true fight for the German sports betting market is yet to commence.
Read also:
Source: www.onlinecasinosdeutschland.com
