Newgioco warns of revenue hit from Italian lockdown
Betting technology provider Newgioco has warned that a nationwide lockdown in Italy, implemented by the government in an effort to slow the spread of Covid-19, could have a negative impact on sports betting handle and revenues.
To date, more than 800 people in Italy have died after contracting Covid-19, also as known as novel coronavirus, making it the worst hit nation in Europe, with only China reporting more deaths as a result of the virus.
Italian Prime Minister Giuseppe Conte this week announced a number of new restrictions as the country seeks to fight back against the disease.
Among these measures was the closure of all betting shops, arcades and bingo halls across Italy until 3 April. However, Newgioco has now warned that the move could negatively impact its operating results and hamper efforts to meet certain filing deadlines.
While Newgioco stressed the temporary closure of its physical locations in the country does not affect its online and mobile business operations, the fact that most professional sports events have been postponed or cancelled may have an effect on overall sports betting handle and revenues.
Newgioco added that the impact, extent and duration of these new restrictions on travel, public gatherings and sports events, as well as the overall effect of the virus, is presently unknown.
“We are closely monitoring the active circumstances and the impact of Covid-19 on our product demand and business,” Newgioco chairman and chief executive Michele Ciavarella said. “Our priority is protecting employees, supporting our customers and providing timely information to our investors and stockholders.
“Along with our management teams in Italy and Austria, we remain in close contact with local and national health authorities and have implemented notification and prevention procedures at our administration offices and physical locations.”
However, Ciavarella also said that Newgioco’s recent expansion efforts in other markets around the world could help to offset some of this negative impact.
“We have recently taken significant steps to expand our global distribution in over 13 countries and have diversified our product offerings as well as fostering the omni-channel features of our Elys betting platform,” Ciavarella said.
“While uncertainty remains around our ability to implement cost containment, the severity and pace of recovery strategies on our business and the market price of our common stock following the Covid-19 outbreak, our long-term fundamentals remain strong.
“We are continuing with planned investments, particularly in developing our US betting platform and products to drive long-term growth and profitability for our shareholders.”
Newgioco will provide further updates to its financial reports, including earnings and cash flow from operations, during the second quarter of the year.