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Assessing the Balkans, Sweden and Holland: Europe’s dark horses
It’s been a very eventful year for the sports betting industry across Europe. Now that we’re approaching the onset of 2023, it’s a good time to take stock and analyse this year’s standout performers – as well as the markets to watch in the year ahead.
Starting with South-Eastern Europe, we’ve seen a strong trend of online sportsbook reaching mass adoption in growth markets, such as the Balkans, and we expect to see this continuing in 2023.
The World Cup, of course, has been a serious kicker towards further adoption, especially with recent regulatory changes. Once the tournament is over, the litmus test for this popularity will no doubt be the extent to which the popularity continues with the resumption of the main football leagues.
In my view, providers who can offer responsible entertainment are going to do great things over the course of the next year.
Take Bulgaria, for example. It is expected to be a true trendsetter for the Balkans over the next five years, by means of overall turnover and GGR. That market is going from strength to strength, and there is no doubt that plenty more in the region will look to replicate that success.
We’re currently at over €260m in sports betting revenue for 2020, with projections expected north of €850m by 2026.
It is reasonable to surmise that the key to this success has been the extensive trust in the market between punters and sportsbooks – as a result, assuming that its neighbouring countries can replicate the brand value, it is undoubtedly a jurisdiction to keep a close eye on.
Second in the Balkans is Romania – just like Bulgaria, it has every potential to become a regional powerhouse. With one of the fastest internet speeds in Europe and a population of close to 20 million, the last seven years since regulation have seen it grow into a force to be reckoned with.
With estimated GGR similar to Bulgaria’s over the next five years, although there are fluctuations in figures, the ONJN is proving to be a fair regulator with solid values for player protection – as well as flexibility with operators to enable them to adapt to market conditions.
Last year alone attracted close to 250,000 new Romanian customers for online. Assuming we continue to see this rate of adoption for this year’s World Cup, come January 2023 when the numbers are announced, we should likely again see some serious success.
The final jewel in the Balkans crown is Czech Republic, which is certainly another market of interest. First up, in 2021, a historic change took place in the gambling industry in the Czech Republic: for the first time, the income of operators from internet games exceeded the income of land-based operations.
Based on data of the Ministry of Finance collected from tax reports, income from internet games was €886m; income from land-based operations was €706m.
According to statistics, the republic's online gambling market revenue share ranked 10th among all European nations, with growth just under 50%. If we look at the gambling product shares of the various national gambling markets, in 2020 sports betting held the top spot with roughly 48% of GGR, followed by casinos with 40%, the lottery with 10%, and poker with 2%. The market trend in the Czech Republic appears to be obvious, as according to statistics, there were 70 licensed land-based business owners running more than 4,000 establishments at the end of 2016 – which holds plenty of potential for online.
At the end of 2016, there were 11 licensed internet game operators, and this is set to grow. By June 2022, there would be 20 licensed internet game operators.
In total, these three markets combined have a collective population of 36 million, making it a serious bloc to be reckoned with!
Finally, the Netherlands is a market that cannot be overlooked. Still in its regulatory infancy, having only gone live this year, there is ample potential here for the right operators, especially given the bonusing challenges, such as for cashback.
This, in many ways, can be very healthy for the market, as this will prove to be a great way of clearing initial deadwood and seeing only the strongest survive. Market margins will be tight, but it will separate the wheat from the chaff.
In conclusion, the situation in the industry going forward is going to be survival of the fittest. The next decisions made will decide who thrives – it is possible that some may begin to regret their public listing.
Privately owned companies that are agile and can adapt will do the best here, especially if they are not restricted by outside shareholders.
Moving swiftly and adapting quickly to these European dark horses will be key – if done effectively, 2023 will no doubt prove to be a very fruitful year.