Bwin.party Q2 Sports Betting Solid, But Casino/Poker Soft

The world’s largest publicly traded online gambling company Bwin.party digital entertainment has issued Q2 revenue results which were “a little softer than expected,” according to a company statement. Although precise details of the results will not be released until August 29, the news was enough to affect Bwin.party stocks, which fell 1% to 85.3p by the day’s end.
Bwin.party CEO Norbert Teufelberger said that for the three months ending June 30th sports betting had produced “solid” results, with volumes and gross win margins “strong” on account of the 2014 FIFA World Cup. Nevertheless, although sports betting results were “in-line with management’s expectations,” Germany’s world cup victory is likely to produce some interesting final figures as around one-quarter of the firm’s total business derives from Germany. Bwin.party will further be affected by the introduction of a German sports betting turnover tax last year
Bwin.party’s solid sports betting performance was offset by a soft performance in the company’s poker and casino verticals, while bingo was fairly flat compared to the previous year. Focusing on poker, results were affected by a cyclical summer season decline exacerbated by a month-long World Cup distraction. The relaunch of PartyPoker in the USA also failed to stem the brand’s decline, while CEO Teufelberger highlighted the fact New Jersey’s regulated igaming market has thus far remained well “below industry expectations.”
“While the decline in the dotcom poker market in the period also affected our casino business, the impact was mitigated by an uplift in player activity in sports betting in nationally regulated and/or taxed markets, largely driven by the FIFA World Cup,” explained Teufelberger.
Bwin.party’s soft Q2 results makes the company’s cost cutting exercises more crucial than ever, with the company now having announced a series of cost-cutting measures intended to save a further €10 million, in addition to the €20 million previously announced.
“While the revenue performance was down on last year, we remain on course to deliver the targeted 70 million euros ($89.50 million) of cost savings in 2013 with more to follow in 2014,” added Teufelberger.
In spite of soft Q2 results, gaming industry analysts have left their full year EBITDA prediction unchanged at €117 million, although it has been noted that Bwin “will have to go well for this to be achieved”.