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EC Keeps A Tight Hold On Ladbrokes’ Virtual Sports Services

Article by : Helen Sep 11, 2020

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Perhaps this is just a coincidence, but after the global pandemic Covid-19, the gambling market is undergoing new changes. The European Commission has started an official check into the activities of Ladbrokes GVC Holdings in the Belgian market. The company has been offering its services for placing bets on virtual sports for many years. At the same time, the government has systematically rejected comparable applications from other gaming operators.

This led to a series of complaints from other platforms who sought an official clarification in March 2019. Applicants argued that it was about unfair competition and the granting of exclusive rights to Ladbrokes. Such actions should be regarded as unprecedented government assistance for the individual needs of the gaming operator.

Ladbrokes currently has 300 land-based betting locations throughout Belgium. This area is managed and controlled by the subsidiary GVC Darby. In February 2014, the company started offering its services at ground points, and since 2015, it has also expanded its offer for the online segment.

It is noteworthy that the government did not have a clear legislative framework for regulating betting on virtual sports in 2014.

It was this reason that was used as an official response for licensees who submitted requests to provide these services in Belgium. The operators were officially banned from adding virtual sports to their gaming portfolios until the market witnessed specific legislative initiatives. The Belgian Gaming Commission did not interfere with Ladbrokes’ activities, and the company continued to offer this type of service on its platforms. In 2017, the market saw concrete steps to regulate virtual machines. This type of service was equated to slot machines. The losses of players were limited to 12, 50 euros per hour.

Representatives of the European Commission noted that the previous terms of service are a violation of competition. Such assistance from the official government is not permissible to one particular company. This is why the EC plans to conduct a thorough investigation and study this issue in more detail. The State of Belgium and licensees who have filed complaints can provide their additional arguments in favor of their views.

The European Union Antitrust Agencies must conduct a full investigation into Ladbrokes’ activities in Belgium. This is necessary to determine whether the company had the exclusive right to provide the relevant services and whether the issued permission could be recognized as unfair government aid.

According to the European Commission’s official statement, the regulator expresses concern that the gaming service could receive the exclusive right to provide and manage virtual bets starting in 2014. The regulator also said it intends to determine if such a permit entailed any benefit or reward to the Belgian government from Ladbrokes.

Ladbrokes has already published interim financial results for the first six months of 2020. The company had a tough time as almost all gaming services in Europe experienced an incredible shock. The same applies to all British divisions of the operator. Therefore, the brand will have to adjust its annual EBITDA forecast. According to preliminary estimates, this indicator could reach 720-740 million pounds. More accurate data will depend on the further coronavirus situation.

Currently, the company’s entire staff is more than 15,000 people located in 6 countries. The brand is one of the oldest and most experienced gambling operators in the retail betting market in the UK, Ireland, Belgium, and Spain. In total, the company has placed more than 2,700 betting points on these territories. This scale of influence allows the brand to take the lead in online betting.