Since recently passing newonline casino games legislation, the northern state of Schleswig Holstein in Germany has awarded its first gaming licenses. Betfair, the British online casino games company has won one of three licenses, with the others going to Germany's Jaxx AG and one to the state lottery.
The other 15 German states have gone in the opposite direction, choosing stricter online casino games laws and have received criticism from top online casinos that accuse them of favoring state monopolies. The European Commission has questioned the restrictions as well.
According to the laws in place in Schleswig Holstein, there is a twenty percent tax on gross profits rather than a more punitive tax on turnover. This means that the taxation would equate to about 3 million pounds, or about 3 percent of core Betfairrevenue.
"We view this as a significant positive for the company, given that it further erodes the bear case on the stock that Betfair would be unable to get licensed outside of the UK," the analysts said.
Commenting on the news, Schleswig Holstein's interior ministry said that it is anticipating awardinglicenses for poker and other casino-style games in the coming weeks. Betfair has applied for these licenses as well, separate from what they have already won.
Analysts have estimated that the illegal sports betting market in Germany is worth at least five billion euros.
As a result of the news of licensure, shares in Bwin.party, which is also eyeing the German betting market, rose three percent.