Aristocrat and Aspire latest to provide Covid-19 updates
Gaming machine supplier Aristocrat Leisure and platform provider Aspire Global have both issued updates on how the novel coronavirus (Covid-19) is affecting their business.
Aristocrat opted to withdraw its outlook statement for 2020 due to “softer demand” as casinos across the world close to reduce the likelihood of the virus spreading.
The business said it has been putting mitigation measures in place for months, as the virus has been affecting its Asian business for some time.
Aristocrat also said that it is putting risk management and mitigation plans into place, so that the business may “emerge from the challenges caused by COVID19 as quickly and strongly as possible".
Aspire, meanwhile, said it is “carefully monitoring” the situation surrounding the outbreak. It said the impact should not be too severe as sports betting only represents 5% of revenue, with online casino revenue unaffected by the pandemic, while remote working has long been an “ established way of working” within the business.
“Due to the relatively small part of revenues from sports betting, Aspire Global do not expect its revenues to be impacted by the broad cancellation of sports events,” the business said. “In order to mitigate the impact from the cancellation of sports events, Aspire Global and its B2B clients will re-allocate resources including media spend to the casino segment.”
Tsachi Maimon, chief executive of Aspire Global, said the business remains confident going forward.
“The top priority for us today is to safeguard the health of our employees and their families,” Maimon said. “We took precautionary actions early and can today conclude that we have maintained a high service level towards our operator customers.
“Aspire Global has been profitable since its foundation in 2005. That, in combination with our strong cash position and ability to generate cash, we are confident about the continued execution of our growth strategy.”
Aristocrat and Aspire are the latest in a long list of businesses in the gambling industry to issue updates on how the virus is affecting business.
Flutter Entertainment, the parent company of Paddy Power Betfair and FanDuel, warned that the cancellation of sports events could lead to a £110m (€121.3m/$136.0m) decline in (EBITDA) as approximately 78% of its total revenue in 2019 was generated by betting on sports.
Flutter’s future merger partner The Stars Group, however, said that while these cancellations will have a major impact on its sports betting revenue, it remained confident of growth as much of its revenue comes from poker and casino. The operator added that so far it has performed ahead of expectations so far in the current quarter.
Ladbrokes Coral operator GVC Holdings revealed that its own EBITDA could decline by £150m because of the lack of sports betting opportunities, before adding a further loss of up to £25m when it was announced that all British horseracing until the end of April would be suspended.
William Hill, meanwhile, suspended its 2019 dividend as it expects significant disruption from the suspension of professional sports - with 53% of 2019 revenue coming from sports betting - and the closure of US casinos.
Affiliate giant Better Collective has said its financial targets remain unchanged despite the ongoing postponements and cancellations.
The Rank Group, LeoVegas, SBTech and Sazka Group all also offered updates.
Across the industry, share prices have plummeted with the The Dow Jones Gambling Index falling more than 20% in a day on Monday and more than 50% in the past month.