Despite reporting a nice growth rate of 16% in the first quarter of the fiscal year, investors are shying away from online gaming provider Unibet. Ironically enough, a recent slump in stock prices was blamed on Unibet’s winning of a license to operate legally in France.
First-quarter figures reported to the Unibet board of directors showed that, in addition to the 16% top line growth, sportsbook revenues were up over 51% in Europe overall, including a 56% rise in Western Europe. Thanks to a pessimistic forecast by CEO Peter Nylander, who predicted Unibet would not beat its 2009 results, investors backed off the stock offering and Unibet lost 25% of its market value just a week later.
Analysts and Unibet representatives are blaming the poor forecast on the exorbitant taxes that would be due to the national government under the recently introduced French gambling laws. Also working against Unibet would be the exclusion of Unibet’s core casino products from France (since Unibet is only applying for a license to provide internet betting in France) and increased marketing costs for the French market.
The high tariffs in France have caused complaint since the new laws in France were first shaped. Notable online bookmakers like Betfair and William Hill departed the French market after the new law’s passage, citing high costs as a major reason.