GVC Banks On State Assistance For A Transition Plan

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Article by : Helen Sep 2, 2020

It is becoming clear that the coronavirus has fundamentally changed the business models of many companies. To adapt to new realities, gambling operators in Germany have to make various strategic decisions that could affect the industry.

GVC Holdings is one of the most advanced operators in Europe. The brand’s management presented a well-developed plan for a new regulatory framework for gambling platforms to the German government. The main principle is that the state should introduce various innovations in several stages. This tactic seems to be more rational than the simultaneous introduction of a full regulatory framework. GVC is currently one of the most successful online gaming operators for the B2C and B2B segments. The brand’s primary business focuses on providing services in the field of online games, sports betting, online casinos, and bingo.

The transition plan should be viewed in 5 main stages. By meeting the government’s requirements, companies will bring their businesses in line with the legislative framework step by step by early 2021. The law was to come into force on July 1. However, it must first be brought into line and ratified by the European Commission. For this reason, the time required for the approval of the document in the relevant authority was first postponed to August 19, and later to September 18.

In any case, the phased introduction of the transition plan will be quite a logical decision. GVC believes that in this way, the regulator will be able to assess each particular business and make sure that it meets all the specified legislative norms. If these conditions are met, then online platforms will fully ensure the implementation of all 5 milestones of the transition plan.

The operator informs that introducing new regulatory requirements regarding the rules for accepting sports betting and conducting financial transactions will take at least several months. More stringent requirements for customer identification and new rules for depositing funds are an equally important issue. It might take from 10 weeks to 3 months to implement such innovations. GVC director of regulatory affairs Martin Lycka fully supports the plans to regulate the gambling market. The top manager insists that the transition plan’s goal is the government’s desire to provide the maximum level of player protection.

If the regulator does not follow the initiative offered by GVC, then the market may change dramatically by the beginning of next summer. While local companies will be busy with a gradual transition, the black market can ultimately entice almost all customers. As a result, the new legislative norms will be useless and will not put things in order.

However, innovations in the legal framework are far from the only difficulty for European online operators. The consequences of the coronavirus have also left an imprint on the activities of almost all gaming services.

GVC reported that the company witnessed a sharp drop in revenues from all bookmakers in mid-July. All services, without exception, were forced to close due to the cancellation of most sports events. The last chance to make up for these losses was the online games service. This seems to be the only reason for investors’ optimistic sentiment, who still hope that the company will be able to get back on its feet quickly.

With the return of popular sports games, the online operator can also benefit from real-time betting. In any case, a change in the management team and a new chief operating officer give hope that the company has a clear plan to get out of this situation.

Helen

Chief Editor

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