The Stars Group Revenue Jumps 35% to $411.5M in Q2 of 2018

The Stars Group (TSG) reported a 34.8% spike in revenue to US$411.5 million for the second quarter ending June 30th, with “impressive momentum” provided by the company’s acquisition of sports betting operations in Australia, which includes CrownBet Holdings and William Hill Australia. Gross profit for the period also rose by 29.8% to $327.9 million compared to the same quarter in 2017, while Adjusted EBITDA noted a 14.8% rise to $168.3 million.

“We continued enhancing our products and user experience across all verticals and executing on our cross-selling strategy. The continued emergence of our sports betting and casino offerings and the addition of our 2018 acquisitions have transformed our business and greatly enhanced the foundation and diversity of our consolidated revenue base,” commented The Stars Group CEO Rafi Ashkenazi.

Poker Up 7% to $271m

In Q2, The Stars Group’s generated poker revenue of $271 million, up by 7% compared to the $202.9 million collected during the same three month period last year.

PokerStars, the world’s largest poker site, accounted for around 52.7% of all TSG revenue in Q2, and for the first six months of 2018 online poker is now higher by almost 10%. In its report, The Stars Group pointed towards a number of different factors which helped drive the numbers higher, including the Stars Rewards loyalty program, and shared poker liquidity in Europe. The latter helped offset its withdrawal from poker markets in Australia and Colombia, although not enough to prevent real-money active unique players at PokerStars falling by 7.3%.

Exchange rate fluctuations also played a significant role in boosting overall business, without which the segment would still have returned 3.9% year-over-year growth.

Online Casino Up 26% to $102m

The Stars Group’s online casino generated $102 million in revenue last quarter, marking a stellar 26.3% increase year-on-year. The gains were credited to CasinoStars adding 150 new games since the beginning of the year, as well as the product being  receiving an increased marketing push. As a result, the online casino vertical accounted for 24.8% of all TSG revenues in Q2.

Sports Betting Up 122% to $20m

Sports betting revenue increased by a staggering 122.2% to $19.6 million in Q2 compared to the same quarter in 2017, with the BetStars brand benefiting from the 2018 FIFA World Cup. During the competition’s first week alone, BetStars welcomed 200k unique players to the site, with many of its customers coming to it via its other products, according to TSG. The revenue number was also assisted by a better betting margin that improved by 1.8 points to 7.9%.

The vertical is expected to make greater gains in the next quarter after contributions are included from its UK-facing Sky Betting & Gaming business, which TSG purchased for $4.7 billion (£2.5bn) on July 10th.

New Opportunities and Markets

TSG’s growth during the second quarter was driven by its international business, with the sector increasing by 15% to $350 million. Furthermore, it continues to carry diminishing geographic regulatory risk for the company as 75% of all revenue collected was “locally regulated or taxed”. Looking to the future, TSG CEO Rafi Ashkenazi explained:

“We are now focused on the next stage of our transformation—integration. While this will be a phased and measured process, we expect that it will prepare us to not only be a leader within the world’s largest regulated markets but to also leverage the strength of our combined platform to take advantage of new opportunities and markets.”

Needless to say, The Stars Group’s sports betting rollout in the nascent US market is expected to yield positive results. The company and its partner Resorts Casino Hotel is not only scheduled to start offering sports wagering in New Jersey later today, but this week TSG said that it would also be teaming up with Mount Airy Casino Resort to provide a similar online sports betting service in Pennsylvania. Meanwhile, Nevada launched its regulated online poker market back in 2013, but excluded PokerStars as a “bad actor” for flaunting the UIGEA of 2006. The brand will therefore be seeking to extend its operation to the Silver State once its 5-year suspension finally expires.