The biggest gaming and sports betting operator in Central Europe, Fortuna Entertainment Group N.V., has recently entered into a licensing agreement with Bet Zone and Bet Active Concept to enter the highly lucrative gambling market in Romania. The two companies will be permitted to use the well-known Czech company’s brand name and trademark in Romania to offer a wide range of online and land-based gaming and betting products. Both Bet Zone and Bet Active Concept are owned by Penta Investments Group, which is also the majority shareholder of Fortuna.
Romania is a very important market in the Central Eastern European area and there is a great deal of potential here for gaming and sports betting now that it has decided to allow in foreign gaming operators after passing Emergency Ordinance 92/2014. The country has put in place positive regulations and reasonable taxation structure on gambling and gaming, which will ensure that the industry can develop to its maximum potential. A 16% tax rate on gross gaming revenue is something that operators are very comfortable with. Furthermore, the country has a population of around 20 million people.
A number of gambling and gaming operators are making a beeline for Romania, and large companies such as PokerStars, Unibet, 888 and Betfair have already been issued licenses to start their operations in this market. The country’s gambling regulator, National Office for Gambling, is eager to provide a positive environment for gambling so that customers are protected while the exchequer also benefits from the additional tax revenues that will surely be generated.
Fortuna, already a very good name in the sports betting arena in Central Eastern Europe consisting of Czech Republic, Slovakia, Hungary and Poland, is very enthusiastic about this new development since it aims to become the premier betting & gaming business in this area. Per Widerström, chairman and chief executive of Fortuna, is very upbeat about his company’s prospects in this market. The company is expected to roll out a number of attractive sports wagering and gaming products across various channels.
The opening up of the Romanian gambling and gaming market could not have come at a better time for the Fortuna Group. Increased taxation levels in its primary markets of Slovakia and the Czech Republic have affected the company very badly, negatively impacting its performance in Q1 2015. Furthermore, there haven’t been any major sports events in 2015 to excite sports gamblers and this too has affected Fortuna’s bottom line in 2015.
The company has rattled its shareholders by posting a 47% reduction in net profits to €4.8 million during this period. However, the market responded very positively to the company’s announcement regarding Romania and there was a 3.3% rise in Fortuna’s share price, enabling it to touch a weekly high position.
Per Widerström is seeking to usher Fortuna into a period of growth via deals such as the one in Romania. The company is also hiring people to enable operational efficiencies and increase shareholder value.