Bookmaker GVC warns of profit hit from German gambling regulations

(Reuters) - GVC Holdings GVC.L said on Thursday new gambling regulations in Germany, its second-largest online-gaming market, will reduce the Ladbrokes and bwin brand owner's 2021 profit by 70 million pounds ($89.89 million).

The tighter regulations, which will come into effect this month, included deposit limits across poker and slot gaming of 1,000 euros ($1,174.60) per month, switching off all casino table games until individual German federal states issue licences, as well as restrictions on advertising.

Isle of Man-based GVC also said the regulations will lead to revenue declines across the German market, which contributed around 15% of online-gaming revenues in 2019, but will not materially change the company’s core profit expectations for the current year.

London-listed shares of GVC were down 2% at 953 pence by 1035 GMT.

Betting shop closures and sport events cancellations during the COVID-19 lockdowns have hurt GVC’s overall revenue, but its online sales jumped nearly 20% in the first half, buoyed by a rise in both sports and gaming categories and double-digit growth across major markets.

Gambling companies, including GVC and William Hill WMH.L have been expanding into the U.S. market to offset a hit from tighter regulations in Britain.

William Hill this week agreed to be bought by U.S.-based Caesars Entertainment CZR.O for 2.9 billion pounds.

($1 = 0.7787 pounds)

($1 = 0.8514 euros)

Reporting by Aakash Jagadeesh Babu and Yadarisa Shabong in Bengaluru; Editing by Shinjini Ganguli and Aditya Soni