UK retail drags on GVC after fixed-odds betting terminal stakes cut
By Josh White
Date: Wednesday 17 Jul 2019
(Sharecast News) - Sports betting and gambling company GVC Holdings said it saw continued "very strong" growth in online in the second quarter on Wednesday, with net gaming revenue ahead 16%, or 17% at constant currencies, despite the comparative period including part of the Football World Cup.
The FTSE 250 firm said UK retail like-for-like net gaming revenue was down 19%, which the board put down to the cut in maximum stakes at fixed-odds betting terminals to £2.
Its board said trends there following the new regulation were better than its initial guidance.
European retail net gaming revenue was up 12%, or 13% at constant currencies, with over-the-counter wagers ahead 8%.
Total group net gaming revenue was up 3% for the second quarter.
Across the pond, GVC said the full online launch of its New Jersey operation was on-track for the start of the 2019 NFL season in September.
Looking at the first half overall, GVC said online net gaming revenue was up 17%, or 18% at constant currencies, with UK retail like-for-like net gaming revenue down 10%.
That measure too was driven by the cut in maximum stakes for fixed-odds betting terminals to £2, the board explained.
European retail net gaming revenue was 7% higher, or 8% at constant currencies, with total group net gaming revenue for the first half 5% higher, or 6% at constant exchange rates.
"Trading in the second quarter remained very strong, with the online division delivering continued material market share gains across all major territories," said GVC chief executive officer Kenneth Alexander.
"This outperformance is driven by the sustainable competitive advantages of our proprietary technology platform, leading product, cutting edge marketing and leading brands, all delivered with an unrivalled understanding of the markets in which we operate.
"The transition to a post £2 stakes-cut environment in UK retail is progressing very well and we believe the Ladbrokes Coral estate is best-placed to take market share."
In the US, Alexander said Roar Digital - the company's joint venture with MGM Resorts 0 was on-track for its full online launch ahead of the NFL season in September.
In the first half of the year, the group was granted licences in Mississippi and Nevada, and Roar Digital received a transactional waiver to conduct business in New Jersey.
"The group expects an announcement in August from Hesse, the state leading the regulatory process for online sports-betting in Germany, detailing the requirements that will govern the new sports-betting licences," Kenneth Alexander explained.
"The strong trading performance of the group means that any potential costs in 2019 associated with the new sports licences are expected to be fully mitigated.
"The board therefore remains confident of delivering EBITDA and operating profit in-line with expectations for the full year."
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