Enlabs acquires KDB Games Ltd, a licensed land-based gaming operator in Belarus, in order to apply for an online license. The acquisition follows a thorough due diligence process after a letter of intent was signed in August and press released August 29th 2019.
The purchase price for all shares is set to approx. EUR 127 thousand. During 2018 KDB Games Ltd delivered EUR 240 thousand in revenues and EUR 30 thousand in net profit. After legal and financial due diligence the opinion is that KDB Games Ltd is eligible for obtaining an online license.
“We are very satisfied to finalize this acquisition and start the online license application process. We are eager to get going and aiming for an initial launch in the first half of 2020. As we have communicated earlier this acquisition won’t have immediate effect on our financials, but it is an acquisition completely in line with our strategy of entering emerging regulated markets in the CIS region.” Says Robert Andersson, CEO and group president at Enlabs.
The online regulation in Belarus was officially accepted on April 1, 2019, with a few key prerequisites for obtaining the license which are:
– Existing offline license for at least two years without complaints
– 1 million USD in deposit to federal bank
– Platform certification and integration to regulators’ system
– Appropriate board and management team
The gaming tax will be 4% from GGR and the licensing system will be effective from April 1, 2021. Until then there is a transition period that allows both licensed, and unlicensed, operators to be active. From the transition date all unlicensed operators will be illegal.
Based on local gaming tax data for land-based operations the estimated total market size is around EUR 500 million. The estimated current online market share is 5-10%, but with an expected growth of at least 25% annually with the big impact expected in 2021 with the blocking of unlicensed operators.
Robert Andersson continues “We will enter the market with our brand Optibet, a brand we are operating as what we call a department store. Optibet is a brand for everyone and it has a variety of content to fit everyone’s preferences. We aim to offer the largest selection of slots and live casino games, sportsbook, poker and bingo. We believe that there will be no more than 10 licensees in the mid-term future with main competition coming from the Eastern operators, which is a market climate we are very experienced in.”