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TOUGH TIMES FOR TIPP 24

For the first time in over eight years, German online lottery firm Tipp24 AG has posted negative half-year earnings following the implementation of the monopolistic State Treaty On Gambling in Germany.
 
This week  the company reported that it had experienced a decline of Euro 6.8 million from its German activities for the first six months of 2009 compared to a profit of Euro 5.4 million in H1 2008. Revenues fell by a debilitating 92.3 percent to Euro 1.4 million.

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The German firm revealed that its earnings were further burdened by restructuring measures made necessary by the introduction of the Treaty.
 
“After being forced to part company with the majority of our German staff in the first quarter, we also gave up the majority voting rights in our former English subsidiaries in April as a further consequence of the State Treaty On Gaming,” said Jens Schumann, Chairman for Tipp24’s Executive Board.
 
“I am still convinced that key aspects of the State Treaty will have to be changed. Over the last years, Germany’s Federal States have lost over seven billion Euros in stakes from this legislation alone. This is money, which the states cannot replace, that is now missing for important institutions in the field of sport, social affairs and culture.”
 
Tipp24's non-German business - mainly in the UK - fared better, growing its non-German earnings to Euro 29.75 million from a loss of Euro 952 000 in H1 2008. Overall net profits increased to Euro 17.3 million from Euro 3.4 million.
 
The company anticipates that revenues will rise to around Euro 85 million for FY 2009 with operating profit before interest and tax achieving Euro 40 million.



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