Germany's online gaming market continues to grow as states try to figure out how they want to respond to legislative changes. Gaming operator LeoVegas is not standing idly by while they resolve their differences and has secured a new license that could be a game-changer for the company and the market.

 

When Germany rolls out the Fourth Interstate Gaming Treaty (GlüNeuRStv, for its German acronym), it probably envisions a methodical nationwide rollout of iGaming. The legislation fostered cohesion among state gambling laws, but some states argued it also meant they could opt out of online gambling entirely.

 

As a result, the expansion of online gambling has been slower than expected, regulators have been slow to approve licenses and states have struck fast. Most of the ones available so far are online slot machines, although online poker has recently begun to appear.

 

LeoVegas takes the lead

As the paradigm continues to shift, LeoVegas is poised to play a significant role in the transformation. LeoVegas, one of the first major approvals since MGM Resorts International acquired the company last year, now has a license to offer and market online slots in Germany.

 

The country’s Joint Gaming Authority (GGL, the German acronym) last week approved the license for LeoVegas subsidiary LVSports Limited. With it, the company can offer ad spots in all 16 states, as well as market to state and federal advertising guidelines.

 

GGL just took over earlier this year, another step in the transformation of the German gaming industry. It brings together a fragmented environment, with different regulators targeting different types of gambling.

 

Not all German states are happy with the way online gambling reforms are being implemented in the country. In mid-January, for example, the leaders of Mecklenburg-Vorpommern generally called for the arrival of the GGL and online gaming.

 

State President René Domke asserted that just because the GGL exists does not mean states must abide by it. He added that the introduction of uniform gambling regulations, including online gambling, did not automatically force states to allow it.

 

This could be a sore spot for LeoVegas as it begins to take advantage of its new license. Casino.org's request for comment for this article did not receive a reply by press time.

 

LeoVegas revenue declines

After being acquired by MGM Resorts, LeoVegas did not see any significant positive changes in revenue. It reported a 1% rise in overall revenue in the fourth quarter of last year, but also posted an operating loss of 2.5 million euros ($2.7 million). A year ago, it made a profit of 6.1 million euros ($6.5 million).

 

The main source of the loss came from operating expenses, which rose 56% year-over-year. Personnel and tax costs rose, and operating expenses blew 16.5 million euros ($17.7 million) from the company.

 

The new license in Germany should give LeoVegas a boost and allow it to see the gains seen in other European countries such as Spain and Sweden. First, however, it has to contend with states that are unimpressed by the prospect of online gambling.