Playtech and PMU among latest to provide Covid-19 updates
Supplier Playtech, French horse racing operator PMU and industrty associations in the US and Germany have issued updates as novel coronavirus (Covid-19) continues to affect the gambling industry.
Playtech said its B2B casino business has “seen limited impact,” though it will continue to monitor the situation.
The supplier added that its poker and bingo verticals have seen an increase in players in recent days, due to restrictions on movement in many countries and closures of many leisure businesses.
Playtech’s B2B sports business, however, has been significantly impacted by the suspension of almost all major sport.
Before the impact of the virus, approximately 10% of Playtech's adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) in 2020 was expected to come from sports betting. Based on 2019’s EBITDA, this would come to around €35m-€40m. However, the vertical is now expected to contribute an EBITDA loss of €4m every month before mitigating actions, until sporting action resumes.
The business’s Snaitech B2C vertical has been further impacted by the lack of sports beyond the initial impact of its Italian retail shops closing. Playtech expects an EBITDA loss of €3m per month before mitigating actions from Snaitech, down from an expected profit of €13m per month.
The supplier’s HPYBET retail betting business in Germany and Austria has also been impacted by the lack of sport and retail traffic. HPYBET is expected to loss of €0.5 million Adjusted EBITDA per month while shops remain closed and sports remain suspended.
Playtech said its white label business has had a “solid performance” thus far this year.
Playtech’s TradeTech trading services platform has so far benefited from the market volatility caused by the virus and has generated adjusted EBITDA in excess of €30m so far in 2020, ahead of the business’s expectations for the full year.
French national horse racing operator Pari-Mutuel Urbain (PMU), meanwhile, has stopped all offline marketing in France as horse racing remains suspended until 15 April. The operator continues to offer bets on horse racing in other countries that have been less affected by the virus.
The German sports betting association (DSWV) issued information about the suspension of sports and 15 of Germany’s 16 federal states agreeing to restrict public activity. While the DSWV said the virus would have an effect on sports betting, it did not provide any estimates on the financial impact on the market.
In the United States, the National Indian Gaming Council (NIGC) has issued guidance to tribal communities. The NIGC called on tribal gaming regulatory authorities to review their emergency preparedness and take any measures necessary for the safety of customers and employees.
“If a TGRA believes that it can no longer attest to its ability to ensure the public health and safety of employees and patrons or if application of tribal laws warrants, the TGRA must consider how to best take mitigation steps that will remedy the threat to public health and safety up to and including closure,” NIGC chairman E. Sequoyah Simermeyer said.
In the past week, several other companies in the industry have issued updates of their own.
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.
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.