Stars Group hails impact of Sky Bet Cheltenham cash-back offer
SBG active users expected to be up 20% in Q1 although cost of offer could reach £25m
Sky Bet’s landmark Cheltenham cash-back offer helped contribute to a 20% rise in active users for the Sky Betting & Gaming (SBG) business, but the cost likely ran into eight digits.
In a Stars Group trading update today, Stars said it expects “strong operational trends” from SBG in Q1, with mid-teens growth in stakes.
The operator warned however that net win margin for quarter would be between 6% and 7%, significantly down from the 9.2% for FY18 and 9.8% in FY17, primarily due to its Cheltenham Festival offer.
On turnover of around £1.15bn for the quarter, the impact of the reduced margin could be circa. £25m.
The money-back-as-cash offer was watered down on the final day of the Festival with Sky removing Best Odds Guaranteed and applying a bigger overround to prices.
However, Stars hailed the success of the offer, which it said contributed to over 20% growth in QAUs and would support double-digit growth in SBG over the full year.
SBG has since adopted the money-back-as-cash concept for all its money back offers
Elsewhere Stars increased its expected synergies from the SBG takeover from $70m to $100m a year from 2020.
The Toronto-listed firm guided to annual growth of 8% to 12% for the whole business in FY19.