NetEnt enters the Swiss online gaming market
NetEnt, a well-known game developer, has made its way into the tightly regulated Swiss online market. Their products will now be distributed by Grand Casino Luzern and Grand Casino Baden. Before entering this market, NetEnt had to obtain the ISO 27001 certificate, a global security standard. Here's a brief summary of their journey.
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NetEnt's CEO, Henrik Fagerlund, welcomed the company's latest expansion, saying, "We're thrilled about entering the Swiss market." This move aligns with their growth strategy and helps strengthen their presence in regulated European markets. Now, NetEnt can offer its entire portfolio of games to the Swiss people for the first time ever.
Entering the Swiss market wasn't an easy task. In June 2018, Switzerland introduced a controversial gambling law through a public vote. Now, online gambling is only allowed through land-based casinos. Any unauthorized activities are blocked using network locks, and operators who don't play by these rules are put on a blacklist.
Only foreign providers who make agreements with land-based casinos are eligible for a Swiss online casino license. NetEnt is no exception; they're partnering with Grand Casino Luzern and Grand Casino Baden. These two establishments already have partnerships with other online gambling providers such as Evolution Gaming, Greentube, Paf, and Casino777.
Gaining ISO 27001 Certification
To get the license, NetEnt had to pass through a strict certification process to meet the ISO 27001 standard, which covers areas like data protection, development, infrastructure, and network configuration. It certifies that a company follows information security management. Once a company obtains this certification, they are granted access to the regulated Swiss market.
NetEnt plans to make more partnerships with Swiss casinos in the coming months. Their CEO, Henrik Fagerlund, is proud of his team's efforts, which led to the certification:
"The ISO 27001 certification is a significant achievement for us. It's the result of immense dedication from our team. We're delighted to be a trustworthy and secure partner for our customers and stakeholders."
The certification lasts for three years. After that, audits will take place to ensure continued security.
Integrating Red Tiger
Recently, NetEnt acquired Red Tiger, another online gambling provider. Like NetEnt, Red Tiger also operates in European markets that need the ISO 27001 certification. Red Tiger's entire portfolio can now be offered in Switzerland. Fagerlund says the integration is ongoing and will help make the company more competitive and efficient:
"We're putting our full efforts into integrating Red Tiger. We want to maximize our capabilities and grow as market leaders in the online casino industry."
After acquiring Red Tiger in September 2019, the company is making changes to its organization, resulting in about 120 employees being laid off. This move is part of the strategy to improve all aspects of the business. Fagerlund believes the acquisition has been a great success:
"The integration with Red Tiger is surpassing all our expectations. The restructuring should save us up to SEK 250 million annually. But, we're expecting restructuring costs of approximately SEK 25 million. We still expect to finish the integration on schedule."
Operating Profitably Despite Covid-19
In April, NetEnt disclosed that they'd pay the Earn-Out compensation for Red Tiger through a share issue and cash payments. This Earn-Out clause defines a part of the purchase price paid based on future performance. While this change affects how they'll pay the compensation, it won't impact their cash flow.
Currently, NetEnt is in a relatively stable position. Despite uncertainties caused by the Coronavirus pandemic, they have remained unaffected. Their projected market value for 2020 is estimated to be between SEK 490 and 500 million. How things will play out remains to be seen.
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Source: www.onlinecasinosdeutschland.com
