Deutsche Telekom applies for Sports Betting License

Ladbrokes

Deutsche Telekom, the telecommunications giant, has announced that it has applied for a sports betting license that could see it pit against online gambling companies who are currently competing for a limited number of concessions.

Reuters was told by a spokesman for Deutsche Telekom that they are still in the very early stages of the application. The spokesman added that although their application was being reviewed by the Interior Ministry of the German state of Hesse they cannot at this stage be sure that it will turn into an operating business. A spokesperson for the Ministry of Interior refused to comment and remained quiet on the issue.

Gambling is regulated in most parts of Germany with the exception of Schleswig where a more liberal approach to online gambling has been adopted.

Although Germany’s states have managed to hold tight control of the online gambling and sports betting market as they do not wish to risk widespread gambling addiction in an unregulated scenario, they have agreed to offer 20 concessions to companies to offer sports bets nationwide.

The rest of Germany has been pressed by betting companies that include Bwin.party Digital Entertainment to also adopt the northern state of Schleswig-Holstein’s more liberal approach.

Betfair and William Hill are amongst many other British listed gambling companies who have reduced their operations in Germany due to the tax and regulatory hurdles.

Betfair Snaps Up Blue Square for GBP 5 Million

Betfair, the world’s largest betting exchange, has acquired Blue Square sports betting platform from the UK based Rank Plc for GBP 5 million. Earlier this year, Rank said that it would be reviewing Blue Square and its contribution to the group’s overall portfolio. In recent years, Blue Square has been underperforming.

According to Rank’s statement on Tuesday, it has “completed the sale of the assets of its Blue Square Bet business to Betfair Group plc for GBP 5 million” and will “….focus its resources on further developing the Grosvenor Casinos and Mecca brands in venues and via digital channels.”

Affiliates who were part of Blue Square’s affiliate program were told virtually overnight that the conditions of sale did not include any affiliate contracts, meaning that all contracts were immediately terminated.

“Any revenues owed from your Blue Square Bet customers will be paid up until April 2nd and final affiliate payments in relation to Blue Square Bet activity will be calculated and paid between the 5th and 15th of this month as per the normal payment run,” affiliates were told. “We sincerely regret the abruptness of this announcement and any inconvenience that it may cause.”

All Blue Square customers were redirected to Betfair’s platform where they “can access a full suite of sports betting and gaming products and receive a promotional welcome offer.”

Blue Square Put on the Market by Rank

Blue Square, the online sports bookie division of the Rank Group is currently running at a loss, partly due to the sports betting market being highly competitive.

Rank purchased Blue Square in 2003 and the company has approximately 120,000 patrons which is a small portion of the group’s income and continual market advertising is required in order to generate revenue. A huge marketing campaign worth £2 million increased revenue at Blue Square by 19% recently.

A proposed new tax regime that is due to take effect in 2014 is bound to see small sports betting operators such as Blue Square’s revenues to decline. Although operators such as Paddy Power, Betfair, Ladbrokes and William Hill will also feel the pinch it will not be to the same extent as smaller operators such as Blue Square.

Blue Square has, therefore, been put on the market by its owner, casino operator Rank who said that it would “undertake a review” of the business.

It is understood that Rank has begun early discussions with certain parties to sell Blue Square as the group would like to consolidate and focus its efforts on its casino and bingo brands, Grosvenor Casino and Mecca. Rank, like other operators, is completing a £205 million deal to buy Gala Coral’s casinos. The Competition Commission is due to hand down a ruling on potential monopolies in a few cities in the United Kingdom that would be created by the deal in February, 2013 but Rank officials appear to be pretty certain that the deal will be approved.

Betfair Leaves Greek Gambling Market

Two weeks after announcing its departure from the German sports betting industry, Betfair, the UK sports betting giant has announced that, due to a lack of regulatory clarity and uncertain regulations regarding gambling laws, it has now pulled out of the Greek gambling market.

London based Betfair revealed that because the value of Greek operating licenses currently remains unclear and it feels that gambling legislation in Greece is contradictory to European law, it has thus far not applied for such a permit.

Betfair also stated that the Greek market is not economically attractive due to the associated fiscal conditions that are attached to the permits, which could include payment of taxes on historical revenues.

The sports betting exchange and online gambling operator has promised to continue working with the Remote Gambling Association (RGA) in an endeavor to achieve legislation that permits fair competition in the market.

Despite the fact that the European Commission originally stated its intention to the contrary, it has not, as yet, taken any adequate steps to halt protectionist behavior.

Betfair also issued a statement saying that they are of the opinion that there are serious issues with the legality of the decision issued by the Greek Gaming Commission of November 5, 2012, that includes provisions for financial penalties and criminal sanctions against gaming operators that operate in the market without a permit. Betfair has withdrawn from the market until greater clarity is received but will continue to support the RGA’s efforts.

Prior to abandoning the Greek market, Betfair revealed that it expected to generate revenues of GBP 13 million together with GBP 7 million in contributions from Greece during the current financial year.

UK Director to Leave Betfair

Iconic betting exchange and sports betting group, Betfair, is currently undergoing some very important changes under its new Chief Executive, Breon Cocoram.

Peter Marcus, who has acted as the group’s director for sports exchange, poker and casino in the United Kingdom for the past 14 months after having been recruited from rival group, William Hill, has revealed that he is at present in talks that will see him depart the group eventually. Betfair’s UK operations account for more than half of its revenues.

Breon Corcoran, Chief Executive Officer of Betfair is endeavoring to shake up the organization and is currently conducting a company strategic review which is scheduled to be concluded on December 13, 2012. The CEO refused to comment on Marcus’ departure from the company but it is understood that he will be leaving Betfair in the next few days.

Betfair revealed that it is laying off over 50 translators as it will be reducing the number of languages made available in Nordic countries, Eastern Europe and Asia and will instead concentrate on “more strategically attractive” countries.

After it was forced to pay a 5% turnover tax on sports betting stakes under new German gambling rules, Betfair withdrew its sports betting exchange service in Germany. It seems as though Betfair will leave the German market altogether in the near future as its’ smaller operations are not able to sustain the group’s presence in that country.

Betfair was founded in 1999 and currently employs over 2,000 people around the world, the majority of which are technology staff.