Newgioco sees losses widen despite revenue increase in 2019
Sports betting and interactive gaming company Newgioco Group has reported an increased loss in 2019, despite experiencing a year-on-year rise in revenue for the year.
Revenue for the 12 months through to 31 December, 2019 amounted to $35.6m (£28.6m/€31.7m), up 2.9% from $34.6m in the previous year, while turnover also climbed 9.9% to $454.1m.
Net gaming revenue for 2019 increased 2.6% to $35.2m, while betting platform software and services revenue, Newgioco’s only other source of income, was up 34.6% to $373,654.
Online remained the most popular form of betting among Newgioco customers, with turnover jumping 39.2% to $92.5m. The company put this down to a rise in the number of web shops opened in 2019 as well as the addition of virtual games products to the online channel.
In contrast, land-based turnover slipped 29.1% to $51.6m, which Newgioco said was due to the conversion of land-based customers to web-based players. This area of the business was also impacted by the closure of 20 underperforming land-based locations across Italy.
Looking at costs for the year, selling expenses - commissions paid to sales agents - were up 14.3% to $27.6m, which Newgioco put down to its aggressive strategy in Italy in an effort to gain a greater market share.
General and administrative expenses were also up 3.8% to $11.0m, though the company said this was in line with expectations and included grant of stock options for the year.
Despite posting higher revenue, increased spending meant Newgioco posted a loss from its operations totalling $3.0m, compared to $155,175 in 2018. After accounting for $5.7m in other expenses, this left the company with a loss before income taxes of $8.7m, higher than $2.4m last year.
After taking into account $598,176 in tax payments, as well as $119,289 in the form of foreign currency translation adjustments, this meant Newgioco ended the year with a comprehensive loss of $9.4m, compared to $3.8m in 2018.
Confirmation of the full-year results comes after Newgioco last month said it had reopened all of its retail betting venues in Italy after the country’s government eased further restrictions related to the novel coronavirus (Covid-19) pandemic.
Newgioco’s land-based betting shops, including locations such as bars and coffee shops, are now open again to customers, and will operate in line with strict measures set out by the Italian government.
The company’s retail sites were forced to close on 9 March after Italy entered into a state of lockdown, in an effort to slow the spread of Covid-19.
Newgioco last month also announced that it had established a new US-facing operating subsidiary with the aim of expanding its sports betting operations throughout the country.
Elys Gameboard Technologies will run as a wholly owned subsidiary of the business, with Newgioco to code its Elys betting platform for US certification.
Newgioco is already in the process of applying for a sports betting licence in Washington D.C. and, if successful this would be the supplier’s first licence in the US market.