Stake’s Danish Gamble: A Desperate Move or a Regulatory Loophole?

Online gambling giant Stake, through its parent company EasyGo, has announced the acquisition of MocinoPlay, the operator behind VinderCasino, as part of its push into regulated markets. The deal is still pending approval from Denmark’s gambling regulator, Spillemyndigheden, but if approved, it would mark Stake’s entry into the Danish market.

Brais Pena, Chief Strategy Officer at EasyGo, called the deal an exciting opportunity to expand into a high-value market.

However, one has to wonder: What exactly is Stake buying? A thriving casino brand? A profitable business? The numbers suggest otherwise.

MocinoPlay: A Financial Disaster

If Stake’s strategy is to buy success, they’ve chosen the wrong company. MocinoPlay’s financial records are a train wreck.

According to Proff, in 2023, the company posted a net loss of -7.4 million DKK (€990,126), adding to a multi-year streak of financial failure. Staff costs tripled in just two years, from -1.2 million DKK in 2021 to -3.6 million DKK (€484,812) in 2023, yet there’s no evidence that this spending resulted in success.

Even more concerning is the complete lack of revenue. Despite operating a casino, MocinoPlay reported zero turnover for 2023. This raises serious questions: How can a casino fail to generate revenue? And why would Stake buy a business with no income and mounting debt?

Speaking of debt, MocinoPlay is drowning in it. Total liabilities skyrocketed from 15.5 million DKK (€2.08 million) in 2021 to 32.1 million DKK (€4.3 million) in 2023. Meanwhile, total equity collapsed to -15.3 million DKK (€2.06 million). In simple terms: the company is worth less than nothing.

This is not an acquisition of a strong brand. This is a bailout for a sinking ship—but what’s Stake really after?

Why Would Stake Buy a Failing Casino?

If Stake simply wanted to enter the Danish market, they could have applied for a license directly. That would be cheaper and cleaner than buying a bankrupt company. But Stake has a major problem: they’re a crypto casino.

Denmark’s Spillemyndigheden does not allow online casinos to accept cryptocurrency. That means Stake would not qualify for a Danish license under its current business model. Buying MocinoPlay might be a way to bypass regulatory scrutiny and gain access to Denmark without actually meeting its gambling laws.

This is a clear attempt at regulatory arbitrage, using a failing company as a Trojan horse to enter the market. It’s not about acquiring a “successful” brand; it’s about buying a pre-approved license.

But if MocinoPlay is already financially doomed, will Stake cover the company’s debts? Will they inject fresh funds into the operation? Or will they strip it down, use the license, and move on?

Denmark’s regulator should take a hard look at this acquisition and ask:

• Why is a crypto-only casino buying a company that doesn’t even generate revenue?
• Does Stake plan to abandon its crypto model for fiat transactions in Denmark?
• Or will this deal undermine Danish gambling laws and allow Stake to sneak crypto operations into the country?

Spillemyndigheden Should Reject This Deal

Stake may claim this deal is about expansion, but the numbers tell a different story. MocinoPlay is a financial wreck with no revenue, mounting debt and no real prospects for success. The only thing of value is its regulatory status, which Stake is clearly trying to exploit.

The Danish Gambling Authority, Spillemyndigheden, must reject this deal. Allowing it to go through would set a dangerous precedent, signaling that failing companies can be used as backdoor licenses for offshore crypto casinos to bypass regulations.

If Stake wants to enter the Danish market, they should play by the rules and apply like everyone else. Until then, this deal should be seen for what it really is: a desperate attempt to sneak into a market they wouldn’t otherwise be allowed to enter.

FAQs

Why is Stake acquiring MocinoPlay?
Stake is acquiring MocinoPlay to gain entry into the regulated Danish gambling market without applying for a new license.

What financial issues does MocinoPlay have?
MocinoPlay reported zero revenue in 2023, with rising debt and heavy financial losses, making it a failing company.

Why doesn’t Stake apply for a Danish license directly?
As a crypto casino, Stake does not qualify for a Danish license, as Spillemyndigheden does not permit cryptocurrency gambling.

What is regulatory arbitrage in this context?
Regulatory arbitrage refers to Stake using the acquisition to bypass gambling laws instead of complying with Denmark’s licensing process.

Will Stake cover MocinoPlay’s debts?
It is unclear whether Stake will inject funds to save MocinoPlay or simply use its license before moving on.

Why does Denmark prohibit crypto casinos?
Denmark’s gambling laws focus on player protection and financial transparency, which crypto casinos often lack.

What risks does this acquisition pose to Denmark’s gambling industry?
If approved, it could set a precedent allowing offshore crypto casinos to enter the Danish market through failing businesses.

Could Stake switch to fiat transactions for Denmark?
While possible, it is uncertain if Stake intends to abandon its crypto model just for the Danish market.

What should Spillemyndigheden do about this deal?
Denmark’s gambling authority should closely scrutinize the acquisition to prevent potential loopholes in regulations.

How does this deal impact the European iGaming industry?
It raises concerns about regulatory enforcement and whether other crypto casinos might attempt similar backdoor entries.