888 Holdings Eyes Departure from German Market
888 Holdings, one of the biggest gaming operators out of the UK, is considering an exit from the UK market after changes in the local regulatory environment impacted its earnings in the country. News of the potential withdrawal was announced in the company’s annual report to shareholders.
The company’s troubles in Germany began last year when a federal administrative court ruled that online gambling was not legal in the state of state of Baden-Württemberg. Though the ruling doesn’t, technically, apply to the entire country it was enough to scare 888 Holdings (or, more properly, 888 Holdings’ German subsidiary) out of the German market entirely.
In its annual shareholder report, the company explained why it was considering leaving the entire German market, even though online gambling is still legal in the rest of German saying:
…general findings of law upholding the prohibition on offering online gaming in Germany under the German Inter-State Gambling Treaty.
In short, if one German state bans online gambling, then online gambling could be considered illegal in all German states. That’s a major problem for operators like 888 Holdings that like to follow the letter of the law in markets where they operate.
That said, 888 Holdings is still considering a challenge to the ruling which it considers to be an unfair barrier to free trade.
News of 888 Holdings’ potential German departure rattled investors and, consequently, sent shares of the company on the decline. As of yesterday, its shares had dropped right around six percent.
On a more positive note, the company’s report to investors also included the fact that 888 Holdings revenue increased four percent in 2017.