Bet-at-Home sees tax burden hit earnings in 2019

Betclic Everest Group’s Central Europe-facing subsidiary Bet-at-Home brought in revenue of €143.3m in 2019, almost exactly level with its 2018 total, while back taxes in Austria hit the operator's full-year profit.

Revenue remained static as betting turnover increased 0.9% to €3.22bn, a record high for the operator.

Betting and gaming taxes declined slightly, to €20.9m, while VAT on electronic services came to €4.9m, down 32.9%.

These lower costs meant that net gaming revenue increased by 2.0% to €117.5m.

The operator’s marketing expenses increased 3.9% to €39.8m, with the business saying it focused its marketing in 2019 on on the start of the 2019-20 European football season due to the lack of a major international tournament for the sport during the year.

Bet-at-Home’s earnings before interest, tax, depreciation and amortization (EBITDA) for the year came to €35.2m, down 2.9%.

Earnings before interest and tax declined 4.9% to €33.2m, and after a financial loss of €138,000, earnings before tax came to €33.1m, down 5.4%.

The operator paid a much higher tax burden in 2019 than 2018, due to corporate tax back payments in Austria from changes in group transfer pricing. While Bet-at-Home paid only 6.8% of earnings in tax in 2018, in 2019 it paid 45.7%.

Overall, the consolidated profit for the year came to €18.0m, down 44.8%.

For the fourth quarter of 2019, bet-at-Home took in revenue of €36.5m on turnover of €779.6m. Net gaming revenue came to €29.6m, EBITDA €8.2m and earnings before tax €7.5m. Consolidated profit came to €12.2m.

Bet-at-Home’s board said it expects gross gaming revenue of €120m to €132m for 2020.

This lower projection was mainly due to loss of “essential” parts of the Swiss market after a where a new regulatory framework in which only land-based operators are permitted to operate online came into force from 1 January 2019.  Switzerland's regulator, Inter-Cantonal Lotteries and Betting Commission (Comlot), has created a blacklist of unlicenced gaming sites, which includes Bet-at-Home.

In addition, a “significant” decline in the Polish market played a part in the lower expecation.

The board added that a decline in revenue from Germany is possible but “can currently not be estimated and is therefore not considered”.

The board expects EBITDA in the range of €23m and €27m for 2020.