Adios, VCGaming Espana
Published: Saturday, July 15, 2006 Online-Casinos.com
ADIOS, ESPANA
VCGaming doing well, but not in Spain
Presenting VC Gaming's trading update this week, financial director Gerard Cassells had good news and bad.
The good news was that VC is performing well in line with its objectives, and maintaining its annual growth rate of 28 percent with solid expansion in the Russian market and continued good performance in Central and Eastern Europe. The bad was that Spanish operations have clearly been disappointing, and the company is disengaging from its ambitious plans there.
Cassells revealed that VC's lack of a sportsbook during the exceptional opportunities afforded by the recent World Cup in Germany, had been offset by savvy marketing across the online casino operations of the group. For example, by selecting a team to win on the casino site VC would offer a Euro bonus.
The disappointing performance in Spain was attributed to relatively low broadband penetration and online transaction levels.
Cassells emphasised that VC's dominant market is Germany and Austria, but said that there had been plans for Spain and trialing had been carried out. Despite strong interest in the games, Spanish gamblers were not putting money into the operations in sufficient amounts to make the continuation of operations in the country viable.
"We see that full broadband internet penetration into Spain is not quite as high as elsewhere, credit card use is lower and maybe they are slightly less prepared to trade over the internet. In three years´ time it will probably be at the same level, but not at the moment," he said.
Russia is a top target for the gambling group, although operations are currently only active in Moscow, Cassells revealed, saying that this was because the capital was the centre where technology use among wealthy Russians was highest.
"Russian people with money are very technology driven. Pretty much the whole of the centre of Moscow has wireless broadband, and there is a lot of wealth," he said. It was of paramount importance to have an experienced and integrity driven Russian partner in that market, and VC had be en fortunate in this regard, teaming up with a lottery organiser.
The traditional problems associated with doing business in Russian were still a factor that demanded attention, said Cassells, emphasising that it was important to get the legal and red-tape obstacles properly addressed, and that this required preparation and an ability to be firm. "There is no point in expecting to carry out deals on the European can-do basis; you have to say that at some point I want this done. A month ago I would have said we would have it finalised by the end of June, we hope to finalise it by the end of July."
