NetEnt Q1 revenues up by 27% as Holland and US beckon
Regulated focus sees supplier look at alternative jurisdictions as Italian revenues predicted to fall
Net Entertainment has set its sights on expanding into the developing US market and the soon-to-be regulated Netherlands after reporting revenues for the first three months of the year climbed 27%.
According to an interim report for the period ended 31 March, revenues at the Swedish software supplier reached SEK188.4 (£17.1m), up on the previous year’s total of SEK148.8m (£13.5m).
In addition, operating profit was up 25% year-on-year to SEK51.2m (£4.6m) at a margin of 27%.
The company attributed the increases to the release of new games as well as new licensing agreements, which included March’s Italy-focused deal with GameAccount Network and last year’s agreement with William Hill.
NetEnt also revealed that it had been working alongside Italian regulator AAMS in order to encourage unlicensed Italy-facing operators to apply for an operating permit.
The supplier said it was prepared to halt the provision of games to such operators should they not gain a licence by the end of the calendar year.
“Short-term, Net Entertainment’s revenues may be negatively affected by this, but it will depend on how many operators that acquire an Italian licence,” Per Eriksson (pictured), Net Entertainment CEO, said.
In anticipation of a decline in Italian revenues, NetEnt plans to expand its business into new regulated territories such as the US, Spain and the Netherlands.
The company is also preparing for the UK’s imminent Point of Consumption regime which for the first time will require software suppliers to obtain a licence from the local regulator.
“Regulated markets is a strategic focus area for Net Entertainment and we are investigating the possibility for establishment in Holland and Spain which are currently regulating online gaming and we are preparing the company for the re-regulation in Great Britain which is expected to take place during the second half of 2014,” Eriksson said.
“We are [also] working on preparations for an establishment in North America,” he added.
The company was recently buoyed by its recent deal with leading operator bet365, which will see the suppliers games placed under its own “Vegas” tab on bet365’s global websites.