Fortuna full-year profits slump 19% following Czech tax hit
Operator blames fall in EBITDA on high betting tax rate and an increase in operating costs to fuel future growth
Fortuna Entertainment Group has announced an 18.5% fall in full-year profits, which the operator blamed largely on an increase to the betting tax rate in its core Czech Republic market.
Total EBITDA for the 12 months ended 31 December 2016 stood at €22.1m, down from the €27.2m recorded the previous year, despite a 10.5% rise in gross win to €163m.
Amounts staked during the 12-month period also increased 22.6% to €1bn, boosted by 23.1% growth in sports betting stakes compared to the previous year, while lottery bets were up 2.8%.
The Central European-focused betting operator said the growth in both amounts staked and gross win was driven by “online web and mobile betting”.
However, the growth was not enough to increase Fortuna’s profits for 2016, which Per Widerstrom, CEO and chairman of Fortuna, said was the result of a trio of factors.
“Our EBITDA was impacted by the increase in the tax rate in the Czech Republic, unfavourable sports results in 2016 and by planned increase of operating costs to support growth opportunities of the company,” he said.
The Czech Republic’s tax rate is currently 23% of gross gaming revenue for sports betting, lottery and online, while online slots and land-based VLTs are taxed at 35%.
Fortuna recently announced it had been granted the country’s first ever licence to operate ‘online technical games’ by the Czech Ministry of Finance.