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Bwin. party warns on German betting tax

By Mark Wembridge

Analysts cut their earnings expectations for Bwin. party  after the online gambling group warned that the introduction of a sports betting tax in Germany would dent its full year figures.

The FTSE 250 group said Germany’s introduction of a 5 per cent tax would knock €5m-€10m from its full-year earnings before interest, tax depreciation and amortisation.

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Although Bwin. party had already flagged that the tax would affect its earnings, the news prompted analysts to cut their full-year earnings per share estimates by 7-8 per cent.

Germany is Bwin. party’s single largest market, and in 2011 comprised more than 20 per cent of the group’s €816m net gaming revenues.

Simon French at Panmure Gordon trimmed his 2012 ebitda estimate for Bwin. party from €173m to €165m, but held his “buy” recommendation on the stock on the back of solid performances from its casino and bingo divisions.

However, Simon Davies at Canaccord Genuity said that Bwin. party faced “deteriorating poker trends and weakness in sports margins”, and warned of downward pressure on the group’s full-year guidance due to intense competition among online poker providers.

The new levy follows a decision by Bwin. party in May to pay Spanish authorities as much as €33.6m in taxes and interest to comply with two historic laws previously not applied to online bookmakers in the country.

Meanwhile, Bwin. party, which was formed last March when sports specialistBwin merged with online poker and casino company PartyGaming , said that a run of predictable results at the European football championships had eaten away at its gross win margins.