Financial Growth

Growth Still Strong for Bookmakers

GVC LogoOne of the biggest gambling groups in the industry, GVC Holdings, has said that revenue from online operations is up 18% on the previous year, taking the sting out of the loss of income from FOBT’s.

GVC own Ladbrokes Coral so they know only too well the effects of the changes in regulations concerning the gambling machines found in retail outlets, but still haven’t made a firm decision over shop closures.

However, the overall increase in revenue momentarily boosted their share price so the money is obviously still coming in from somewhere, but where? The answer to this is from online markets.

World Wide Web

World Wide Web“Online continues to be the most impressive part of the business,” thus says David Brohan, an analyst at Goodbody.

In fact, growth has hit double figures in all key markets, but only because the internet grants access to marketplaces far and wide. GVC saw growth in both Australia and Brazil hit a stonking 38%, but Germany is another story.

The gambling industry is only lightly regulated in Germany, but August will bring news of regulation changes to online betting which may cost GVC dearly in licensing fees.

However, these costs are predicted to be dwarfed by the potential profit to be made, and Kenny Alexander, chief exec at GVC agrees, saying, “any potential costs in 2019 associated with the new sports licences are expected to be fully mitigated”.

USA to the Rescue?

American FlagSports betting was legalised in America by the federal government in May last year, and as such presents itself as extremely fertile ground for expansion by well established gambling companies in the UK.

Partnering with a US group is a requirement for any gambling company that wants to trade there, and GVC have gone for MGM Resorts, opening the door for licences in New Jersey, Nevada and Mississippi already.

William Hill and Flutter Entertainment (PaddyPower Betfair) have already set up Betfredacross the pond, and GVC has only narrowly been pipped to the post by BetFred who have teamed up with OPTIMA and SCCG Management to set up a US betting platform.

The kind of money that can be made in a huge country like America will offset any losses felt by the reduced maximum stakes on FOBT’s, but good business means looking at all of your income streams separately and ensuring they are all individually profitable,  so I wouldn’t consider the high street saved.