Frustrated operators consider Danish future
Danske Spil's stranglehold on Denmark's online gaming market could see rivals leave the country
Danske Spil’s continued dominance of the regulated online gambling market in Denmark could lead to foreign operators pulling out of the country duo to its lack of profitability, according to one operator with a Danish licence.
The former Danish monopoly currently has an estimated 60% of the market and a source at a major rival told eGaming Review that the cost burden of competing fiercely for such a small market share could soon prove too high for some businesses.
“Companies like ours are competing for only about 10% of the market, so we have to ask whether it is worth doing all the investment and costs of compliance needed,” he said.
“I would not be surprised if operators surrender their licences in Denmark like many did in France and Spain. Companies should probably be putting their resources somewhere else,” he added.
Danske Spil is currently split between its lottery business, which remains a monopoly with profits going to charitable causes, and the company’s private betting and casino arm.
Morten Ronde, CEO of the Danish Online Gambling Association (DOGA), said he was unaware of any of its members wanting to leave the market imminently but that the future still remained uncertain if Danske Spil maintains its market share.
“This is of great concern for DOGA which is why we launched a complaint with the competition authority last year against Danske Spil’s market dominance,” he told eGR.
“Operators pulling out is certainly the worst case scenario but all we can do is talk to relevant authorities and politicians as they need to be warned,” Ronde added.
DOGA has previously criticised the current situation and called on authorities to introduce new regulation to help reduce Danske Spil’s “unfair” advantage.
Speaking with eGR this morning, Danske Spil CEO Niels Folmann said the operator would continue “running the same strategy” and would “protect” its market share.
According to the most recent figures from the Danish Gambling Authority (DGA), the online and land-based market combined grew 16% year-on-year in 2013 as GGR increased to DKK2.4bn from DKK2bn in 2012.
The online casino market recorded its strongest performance since the re-regulation of the egaming market after a 10.6% year-on-year rise in GGR during Q4 2013 to DKK260m.
Yesterday it was announced that the Danish operator Danske Spil had further expanded its presence in the market after it acquired 60% of Aalborg-based developer and operator Cego.