GGL grants ZEAL virtual slot and gaming licenses in Germany
ZEAL Network, the leading German online lottery provider, has secured new gambling licenses for virtual slot machines and games in Germany. The first permit granted by the Gemeinsame Glücksspielbehörde der Länder (GGL) authorized ZEAL to offer iGaming across the 16 federal states of the country. The other license for virtual slot games enables ZEAL’s subsidiary, LOTTO24 AG, to provide German players with online gaming via its web shops that will be up and running a few weeks later.
GGL grants ZEAL virtual slot and gaming licenses in Germany.
©Stefan Widua/Unsplash
ZEAL was previously known as Tipp24. It went live in Germany in 1999 and was initially an online lottery broker. By 2004, Tipp24 had a million customers on its platform. In 2009, an internet ban on lotteries in Germany forced Tipp24 to shift focus from online lottery brokerage to lotto betting. In 2012, Tipp24 released its first new products, including Eurojackpot. Meanwhile, LOTTO24 AG, which had formed in Hamburg by spinning off Tipp24, became Germany’s first official online lottery broker after the lotto ban. Tipp24 decided to move its registered office to the United Kingdom and shifted to London, where the rebranding revealed the new name of the entity – ZEAL Network – in 2014. Six years after it became Germany’s first official online lottery broker post the internet ban on lottery, LOTTO24 was acquired by ZEAL. The takeover was officially completed in 2019 when the company’s office returned to Germany. ZEAL owned 93 percent equity of LOTTO24 before the company bought the remaining shares and completed the delisting of the spun-off entity from the Frankfurt Stock Exchange in 2021.
The German lottery provider has a market cap above €830 million and is venturing into a new gambling segment. Ever since its inception, the operator has primarily focused on the lottery segment. Almost 24 years later, ZEAL is expanding its operations by offering German players iGaming options that will be available at its own web shop. This shop will go live in a few weeks and will be home to over 70 games for its users. Subsidiaries of ZEAL, like LOTTO24 and Tipp24, will offer virtual slot machines through these web shops. After entering a new segment in the regulated German gambling market, ZEAL believes that this is a huge new milestone for the operator. The entity intends to expand further this year, and the first move coming in a few weeks would be the company’s diverse portfolio. The operator has always made its portfolio accessible to third-party providers like Park Avenue Gaming. In addition to that, the entity will certainly be pleased to have secured a gambling license for a new segment in a jurisdiction monitored by one of the sternest gambling regulators in the world.
Despite being a German operator, entering different gambling segments of the regulated German gambling market is anything but easy. Earlier, the 16 federal states had individual regulators to monitor gambling activity and issue gambling permits to operators who apply. The GGL was brought in as the country’s first central gambling regulator at the start of this year. The Joint Gaming Authority of the Federal States now holds complete responsibility for all gambling activities that take place in Germany, from issuing licenses to battling unlicensed operators who constantly attempt to enter the market and threaten its integrity. The year started with GGL receiving about 78 applications for gambling licenses. Only 25 applications were approved, and gambling permits were issued to those operators. Paperwork of the rest was studied later, and many applications were rejected due to information mismatches and other errors. The verification process was strict even before GGL took the regulator’s seat. Germany has granted less than 700 permits in its regulated gambling market history after receiving more than 3,500 applications.
The Chief Executive Officer of ZEAL, Helmut Becker, expressed his contentment after seeing the operator reach a new milestone in its expansion journey.
“We are very pleased about the license and are looking forward to being able to offer our online games to new customers very soon. With the license, we are reaching an important milestone in our business growth, for which we have long fought. We believe in our virtual slots strategy and are proud to offer players a whole new gaming experience very soon.”
ZEAL became the newest member of WLA
Days before announcing its expansion into a new gambling segment, ZEAL revealed that the entity had become the newest World Lottery Association member (WLA) member. The lottery and iGaming operator jumped on board after committing to the strict industry standards put in place by the WLA, which include responsible gaming, security and risk management, and social responsibility.
The WLA is an international entity comprising licensed lottery and sports betting operators and service providers. To be a member of this esteemed organization, an operator must follow the highest operational standard. Just like ZEAL, the WLA was also established in 1999. It was formed after the merger of the AILE, the International Association of State Lotteries, and Intertoto, the International Association of Lotteries and Lotto Organizations. Its purpose is to spread awareness and education the masses about the lottery industry.
Currently, members from 80 different countries are part of the WLA. ZEAL is not the first Germany-based member of the WLA. Several state-based lotteries from Germany are already part of the organization. Apart from focusing on education about lotteries, the WLA also participates in charitable causes with the help of its members. In 2021, approximately €73.2 million was raised for these causes.
2022 was a profitable year for ZEAL and its subsidiaries
Last month, ZEAL published its preliminary annual report for 2022, which recorded some very promising numbers that boosted the entity’s expansion plans this year. Quite a few things could have impacted the annual revenue of gambling operators and service providers worldwide. These factors included the Russian-Ukrainian war, the global recession, and more. Despite all concerns, the annual report yielded an extremely positive result for ZEAL. In 2021, 544,000 customers were registered on ZEAL’s platforms. Last year, that number increased by 29 percent and rose to 703,000 registered players. Amongst them, the Monthly Average Active Users (MAU) finally crossed the million mark after touching 964,000 in 2021.
The annual revenue of ZEAL recorded an impressive 21 percent spike as the amount jumped from €86.8 million in 2021 to €105.2 million at the end of 2022. The gross margin was also up 0.7 percent from 12.2 to 12.9 percent. The operator claimed that the revenue spiked because of a higher-margin product mix. The expansion in business volume also benefitted ZEAL as it enabled the entity to increase EBITDA by almost €4 million. The company’s market share increased from 39 percent to 41 percent. In 2021, the billings were at €656.5 million. Last year, that figure rose to €758.4 million, marking a 16 percent increase. The Average Billings Per User (ABPU) per month also marked a 4 percent year-on-year increase.
