A surge in online gambling during lockdown and the rapid growth of the fledgling US market have paid off for Britain’s betting companies, with only William Hill struggling to make hay during the pandemic.
Entain, which owns Coral and Ladbrokes, reported a £175m profit in the year to the end of 2020, on revenues that were flat at £3.6bn.
A 28% increase in income from online gambling, which the company put down partly to punters being stranded at home during the pandemic, helped offset the closure of UK bookmakers due to Covid-19.
BetMGM, the company’s US joint venture with MGM Resorts, the Las Vegas casino operator that launched an abortive £8.1bn bid to buy Entain earlier this year, continues to grow rapidly.
As the lucrative US market opens up, after the supreme court’s landmark decision to overturn a ban on internet betting, BetMGM has emerged as one of the key players, with 18% market share in the 12 states where it operates.
The venture more than doubled its revenues to $178m (£128m) during the year, although expansion is proving expensive, with committed investment already at $450m.
British betting and gaming firms have flocked to the US, where their expertise in the mature UK market has made them valuable takeover targets or business partners.
Flutter, which owns Paddy Power, Betfair and SkyBet, sealed a merger with Canada’s The Stars Group and has carved out an even larger slice of the soaraway US market than Entain.
The London-listed but Dublin-based company has claimed leadership in online betting, with 40% of market share in sports during the fourth quarter and 20% of gaming.
Flutter has doubled its estimate of the total US market up for grabs, predicting that it will exceed £14bn pounds by 2025, due to an increase in estimated sportsbook value and in the number of states it expects will legalise gambling.
“Nowhere has our growth been more evident than in the US, with customer economics that continue to exceed our expectations,” said its chief executive, Peter Jackson.
Group revenues, adjusted to reflect the tie-up with The Stars Group, were up 28% to £5.2bn, with reported profits falling to £1m after a £432m accounting adjustment related to the deal.
The Paddy Power Betfair division, which houses the company’s UK bookmakers, saw a 36% decline in high street revenue but made up for it with an 8% increase in online revenue to nearly £1.1bn.
While Entain and Flutter thrived, William Hill – whose £2.9bn takeover by Las Vegas casino company Caesars Entertainment is due to complete this month – faltered.
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While its rivals maintained or increased revenues, William Hill suffered a 16% decline to £1.3bn, while profits slumped 61% to £57m.
Bricks-and-mortar stores are just 4% of Flutter’s revenue but make up a quarter of William Hill’s and its high street estate saw income cut in half.
UK bookmakers remain closed but can open again from 12 April under government plans.
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source https://cryptonews.wealthsharingsystems.com/2021/03/uk-betting-companies-report-profits-in-2020-as-us-market-opens-up-gambling/
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