888 Holdings says rise in online casino and poker may partially offset loss of sports betting
Tuesday 24th March 2020
Sports betting accounted for 16% of group revenue last year, though with customers remaining indoors it is seeing increased levels of activity for virtual gambling products.
888 Holdings Plc (LON:888) shares bumped 24% higher in Tuesday's early deals after the online gambling company told investors that increased customer engagement with virtual casino and online poker products might partially compensate for the suspension of sporting events.
Giving its outlook for 2020 and the impacts of coronavirus (Covid-19), the company said its unclear how the fast-moving situation will evolve in the coming months.
It did, however, note that its sports vertical accounted for around 16% of group revenue in 2019.
888 said that it estimates a potential hit to earnings (group EBITDA) of "up to high single-digit millions of dollars" if the disruption of global sport continues until September.
Whilst the online-only gambling firm said it has seen some offsetting activity for virtual or simulated events, like poker and casino games, it also cautioned over the impact that economic disruption may have.
A prolonged period of global macro-economic uncertainty may impact consumer spending on online gaming, the company acknowledged.
Additionally, it highlighted the potential for "gambling-related harm" as individuals isolate.
"The board recognises that, with people spending more time at home and with potentially increased stress from economic uncertainty, 888's vigilance on safe gambling and preventing gambling-related harm is even more important than ever.
"The group continues to offer its customers support and is proactively communicating with its customers to make them aware of safe gambling tools to limit and control their play."
888 told investors that it had US$99.5mln of cash at the end of 2019.
It added: "As a purely online operator with diversified brands across product verticals and geographies, a strong balance sheet with US$99.5mln of cash and cash equivalents at the 2019-year end, and a proven track record of delivering operational efficiencies, the board is confident in 888's ability to manage these challenges."
888 described strong momentum at the end of 2019 which culminated in a new 'all-time' monthly revenue record, and, it said that this continued into early 2020.
The year to date (up to 18 March) the company said it traded in line with its expectations, with average daily revenue up 18% above the comparable period of last year.