Holland Casino has recently unveiled its financial results for the first half of 2024, revealing a challenging period for the company. The operator experienced a notable downturn, with a loss of €3.5 million ($3.9 million) compared to a profit of €17.2 million in the same period last year. This substantial shift has been attributed to several critical factors, including rising operational costs and an increase in gambling tax.
Losses and Declining Revenue
Holland Casino’s financial report for the first half of 2024 highlights a significant loss of €3.5 million. This stark contrast to the €17.2 million profit recorded in H1 2023 underscores the severe impact of increased costs on the company’s financial health. The primary contributors to this downturn include escalating operational expenses and a one-percentage-point increase in gambling tax.
Revenue for the period fell by 2.4%, totaling €395.4 million. This decline is reflected in both the physical branches and Holland Casino Online. While revenue from physical locations decreased slightly by 0.5%, the online division saw a more dramatic drop of 14.7%. Despite a minor increase in visitor numbers, the average spend per visit decreased, compounding the revenue challenges faced by the company.
Rising Personnel Costs
One of the notable factors impacting Holland Casino’s financial performance is the surge in personnel costs. These expenses rose from €136.5 million to €151.5 million, driven by high inflation and increased costs associated with the collective labor agreement. This rise in costs was anticipated by the company, which had already projected a decline in profit during this period.
CFO Ruud Bergervoet’s Statement
Holland Casino CFO Ruud Bergervoet emphasized the financial strain caused by heightened costs. He pointed out that inflation, the increase in labor agreement expenses, and investments in gaming offerings and staffing were significant contributors to the company’s financial difficulties.
Bergervoet also highlighted the ongoing challenge of repaying debt accrued during the COVID-19 pandemic. The combination of these factors has left Holland Casino’s financial position vulnerable. He stressed the importance of avoiding further cost increases to prevent worsening the current loss situation.
CEO Petra de Ruiter’s Concerns
Holland Casino CEO Petra de Ruiter expressed concern over the company’s tax burden, which is projected to approach 50%. This high tax rate, combined with the inability to pass on cost increases effectively—unlike supermarkets—presents a formidable challenge. De Ruiter warned that without adjustments, the company could face significant losses.
The CEO also mentioned the potential impact of necessary cost-cutting measures, such as aggressive guest recruitment campaigns or reductions in prize money. De Ruiter argued that these actions would be detrimental to both the company’s financial health and the broader objectives of gambling regulation. Additionally, planned investments in prevention policy could be compromised due to these financial pressures.
SkyCity’s Financial Results
In a related development, SkyCity has also released its financial figures for the fiscal year 2024. While the company reported a marginal revenue increase of 0.3%, it faced a net loss of NZ$143.3 million ($88.3 million). This loss contrasts with Holland Casino’s situation but highlights a broader trend of financial difficulties within the gaming industry.
Holland Casino’s financial results for the first half of 2024 reflect a period of significant strain, driven by rising costs and increased taxation. The company’s loss of €3.5 million starkly contrasts with the previous year’s profit, underscoring the impact of external economic pressures. As Holland Casino navigates these challenges, the management’s focus will be on stabilizing the financial position and mitigating further losses.
The broader context of financial struggles within the gaming industry, as evidenced by SkyCity’s results, suggests that Holland Casino’s situation may be part of a larger trend. The company’s response to these financial pressures, including potential cost-cutting measures and strategic adjustments, will be crucial in determining its future trajectory.