In its year-end 2018 and quarterly report for October to December 2018, digital entertainment and gaming solutions provider NetEnt has offered its view on the US Department of Justice’s revised opinion on the Federal Wire Act. Despite a lack of clarity about how the new opinion will affect business, the firm said its plans for US growth remain on track.
Therese Hillman, Group CEO, updated investors, saying: “In the US, we follow the developments closely after the Office of Legal Counsel of the US Department of Justice issued its opinion about online gambling in January. This has created some uncertainty, but at this stage we do not see any reason to reconsider our US growth plans, which include growing on the regulated markets in New Jersey and Pennsylvania. With regards to timing, however, we see that the launch in Pennsylvania will be delayed due to changes in the regulatory requirements.”
Talking more generally about US developments, she added: “Today, the majority of NetEnt’s customers are in Europe and the company will continue to focus on the European market, but expansion into North America is also expected to contribute to long-term growth. In the US, a few states have opened for online gaming: Nevada (poker), Delaware (all games) and New Jersey (all games). NetEnt applied for a license in New Jersey in 2015 and has since that had a temporary license (transactional waiver) to distribute games to several operators in the state, while its full license application is being reviewed.
“In Pennsylvania, a new gaming legislation has recently been adopted that allows online casino gaming, and NetEnt has applied for a license in the state. NetEnt is continuously monitoring developments in other US states that are close to regulating and the company intends to launch its products on these markets if the conditions are right.”
She concluded: “In Canada, the market is regulated and open for online casino in several provinces such as Ontario, British Columbia and Quebec. As a first step to enter Canada, NetEnt has obtained a license in British Columbia.”
On Q4 performance, Hillman noted: “In the fourth quarter, several of our new games performed well and revenues increased by 9.5 percent (3.9 percent in euro). The adjusted EBIT margin improved to 37.3 percent, supported by higher volumes, the weaker Swedish krona, and better cost control. I look forward to another busy year as we continue to strive for higher organic growth with maintained cost control.”