Online gambling operator 888 Holdings revealed yesterday that its 2020 core profit could suffer a blow in the high single-digit millions of dollars in case the disruptions in international sporting events schedule because of the coronavirus pandemic remain until September.
The Covid-19 trading update published by 888 Holdings on March 24th made the company part of the gambling operators, such as GVC Holdings, Flutter Entertainment and William Hill, which have already issued warnings of an expected big hit to their earnings due to the cancellation of all major sports events.
Still, considering the fact that 888 Holdings has a smaller exposure to sports in comparison to some of its rival companies, the losses it is expected to suffer, could be smaller. According to information provided in the company’s financial reports, its sports arm accounted for only 16% of its 2019 revenue.
The gambling operator revealed that the Board is currently closely monitoring the situation with the coronavirus spreading in order to make sure it complies with all guidelines unveiled by the country’s government and health organisations. It also noted that, for the time being, Covid-19 situation is quite dynamic, so it remains unknown how it would evolve in the upcoming months, along with the cancellation and postponement of various sports events.
Online Gambling Operator’s Board Confident It Would Manage to Deal with Market Uncertainty
Despite the difficulties the gambling group could face due to the slowdown in its sports betting arm, 888 Holdings revealed that there was some evidence of rising customer activity in its casino and poker operations. According to preliminary projections, if the trend of such an increase continues, it might, in part, compensate for the disruption in sports betting operations for a certain period of time in the short term. However, if the disruption continues for a prolonged period of uncertainty, there is a possibility that customer spending on the online gambling operations of 888 Holdings may also be affected.
As mentioned above, the Board of the gambling giant has estimated that the potential impact on Group earnings before interest, taxes, depreciation and amortisation (EBITDA) in the ongoing financial year could be worth up to “high single-digit millions of dollars” should the disruption to international sporting events calendar continues until September 2020.
Despite the hard economic situation and the market uncertainty, the Board of 888 Holdings shared it remains confident that the gambling group would be able to manage the challenges, especially considering the fact it still has diversified brand presence across several markets on a global scale and various product verticals, not to mention a strong balance sheet at the end of the previous fiscal year. The track record of the company remaining operationally efficient, as well as its growing customer base, are seen by the online gambling operator’s Board as significant opportunities for further growth in 2020 and the following years.