888 reports strong start to 2020 despite coronavirus sports betting hit
Sports betting arm of London-listed operator to be severely disrupted as players move to casino and poker products
888 has announced that it expects to see a significant impact on both sports betting EBITDA and revenue in 2020 due to the coronavirus pandemic.
In a trading update released today, the London-listed operator confirmed that it was closely monitoring the impact of the outbreak and how it will affect the business in 2020.
With sporting events around the world being cancelled and postponed, 888 confirmed that sports betting accounted for 16% of total revenue in 2019.
888 guided that should severe disruption to the sporting calendar continue until September 2020, it estimates there could be a potential impact on EBITDA of up to “high single digit millions of dollars”.
The group said that through its diversified brands and a strong balance sheet with $99.5m in cash and cash equivalents for 2019, it was confident in its ability to manage the problems posed by coronavirus.
Shares in 888 were also up 33% today after closing on 83.5 yesterday.
888 noted that due to more people spending time in their homes and facing economic pressures, the group’s gambling harm prevention was “even more important than ever”.
Elsewhere, 888 pointed towards an increase in customer activity in its casino and poker products and said that it could “in part, compensate for the sports betting disruptions for a period of time”.
The group also provided an update on its trading during the year to date, with average daily revenue 18% above the comparable prior year period.
888’s casino and sport verticals, in the year to date, had both recorded an average daily revenue 24% ahead of the prior year.
Additionally, new customer acquisition across 888’s B2C business in the year to date is 20% higher year-on-year with B2C average daily deposits also up by 32%.
Peel Hunt analyst Ivor Jones said: “888 has reported a strong start to 2020 and highlighted the potential impact of the halt to the sporting calendar.
“We believe that online gambling will be relatively well-insulated from the negative impacts of Covid-19 and that 888, with a solid net cash position, will bounce back strongly after the crisis,” he added.