Increased activity in its online poker and casino products has helped The Stars Group achieve strong results in the opening quarter of the year, with revenues expected to rise by 27 per cent to US$735m (Q1 2019: $580m).
The group, which owns Sky Betting and Gaming, said that the cancellation or postponement of global sport in March coincided with an increase in activity in casino and poker, with international revenues growing 44 per cent in the month – more than mitigating the sporting disruption.
The switch to casino and poker has continued in to Q2 2020, the group added, with consolidated average daily revenues in the first two weeks of the quarter 33 per cent higher compared to Q1 2020.
On the same basis, international revenues were 75 per cent higher, benefiting from increased activity in online poker and casino. In the UK revenues were 30 per cent lower, with growth in gaming partly mitigating a reduction of approximately 65 per cent in stakes. In the Australian segment, with horse racing continuing, the growth in racing revenues fully mitigated the loss of sports revenues. The group did sound a note of caution concerning Covid-19, though.
“If the COVID-19 pandemic continues for a prolonged period causing continued global macro-economic uncertainty, it is possible that consumer spending across The Stars Group's product offerings may also become adversely impacted,” the company stated.
“Similarly, the return of sporting events earlier than currently anticipated could benefit The Stars Group's sports betting revenues, but could negatively impact the current increased activity across its online poker and casino products.
“However, the operating environment is evolving rapidly, and it remains difficult for The Stars Group to predict the scope, timing and length of the current Covid-19 pandemic and related restrictions and sports postponements and cancellations, and the impact that this will have on The Stars Group's business for the remainder of 2020.”
The Stars Group estimated that for each month horse and dog racing and major sporting events are cancelled there would be a reduction in operating income of £10m to £15m in the UK segment and by up to AUS$10m in Australia, with no material negative impact internationally.
