Net Gaming Europe, the iGaming affiliate business has put a decline in revenue and profit in the first half of the year down to the impact of new regulations across the European market.
Revenue has amounted to €7.6m (£6.9m/$8.4m) within the six months to June 30, 2019, which is down from €8.9m last year.
External expenses have been reported to have gone down to €1.3m, but personnel costs have jumped from €1.6m to €2.0m, while other operating expenses climbed from €1,000 to €33,000.Gai
Operating profit has fallen from €5.9m to €4.2m, with profit before tax slipping from €4.5m to €3.4m and earnings before tax, depreciation, interest and amortisation EBITDA from €5.9m to €4.6m.
It has been said by Net Gaming that the impact of new regulations were felt by operators in Q2, with revenue for three months to June 30 down 24% year-on-year to €3.5m.
The business has also noted an accelerated transition from the cost per acquisition to revenue share, saying that this will have an adverse effect in the short term, but strengthen growth over time.
EBITDA for Q2 was down 32% to €2.0m and profit after tax took a decline of 41% to €1.2m. Operating profit was also down from €2.0m to €1.9m, while profit for the period slipped from €2.1m to €1.2m.
Marcus Teilman, President and Chief Executive of Net Gaming, said: “As expected, we were affected by continuing political regulation effects in the European market in the second quarter.
“Our ambition is to continue focusing our efforts on increased geographical distribution of our revenue, partly through acquisitions and partly through organic growth in both existing and new geographical markets.
“Continuous minimisation of the company’s risk by spreading political risk over several geographical markets is a strategy we will be pursuing going forward.”
Teilman also highlighted Net Gaming’s acquisition strategy, which saw it buy Sweden-facing BettingGuide.se in Q2 and UK digital brand Maxfreebets.co.uk after the end of the quarter.
“With the acquisitions, we are increasing the pace within the betting vertical, while adding two new revenue pillars in regulated markets we believe to have good long-term development potential,” he said.