Despite the overall decline in GVC Holdings’ revenues, partypoker’s net income increased by 60%. The increase was due to the cancellation of sports events and the closure of offline casinos

GVC Holdings Report

Last Thursday, GVC Holdings published an interim report for the first half of 2020. The holding’s profit remained virtually unchanged compared to the previous year. But due to the pandemic and the continuing uncertainty about its consequences, the company’s board of directors decided not to pay dividends to shareholders.

GVC Holdings reported $2 billion in revenue for the first six months of 2020. This is 11% less compared to the same period last year. But at the same time, online income grew by 21% compared to the same period last year.

GVC is a huge gambling holding that owns partypoker, Ladbrokes, Coral, Bwin, and two dozen other companies in the field of casinos, online and live sports betting. Partypoker has become the best product of GVC Holdings over the past six months. Partypoker’s Net Gaming Revenue (NGR) increased by 60%. This indicator is associated with two factors:

  • Attracting new users to the poker-oriented room
  • Cross-selling in casinos and sports betting.

According to the new CEO of GVC Holdings, Shay Segev, the results are encouraging given the current unprecedented trading environment in the market. Shai Segev also added that he considerers the biggest growth opportunity in the USA market. Now in the United States, the joint company GVC and MGM BetMGM is trying to seize the leadership in the gambling industry. So far, the company operates in 7 out of the 21 states where gambling is allowed.

Net income of GVC Holdings remained at the level of the same period last year and amounted to $2.7 million. The company’s profit before interest, taxes and depreciation (EBITDA) decreased by 5% ($456.4 million). GVC Holdings expect this figure to – at least double – due to the return of most of the major sporting events and the recovery of sports betting. The company expects EBITDA at the end of the year at the level of $950 million to $975 million. Net income from games (NGR) of the entire holding increased by + 19%, while NGR from sports betting increased by 5% and NGR from sports betting increased by 31% from the rest of the gaming.

Also, the following are the highlights of the GVC half-year:

  • Better response to lockdown in the field of protection of potentially vulnerable users.
  • A second round of investment in BetMGM ($ 450 million in total) to accelerate the quest to become a leader in the fast-growing US online betting and gaming market.
  • The completion of key technical integration of Ladbrokes and Coral brands on the GVC platform.
  • The transfer of the GVC management and, therefore, the tax residence to the UK.

An unprecedented trading environment for the online gambling market

Such indicators of the financial statement are a result of external factors. The key point is to understand that GVC Holdings is a giant with a small share in poker. The main focus of the holding is on sports betting and casino games.

In the spring of 2020, the whole world plunged into a lockdown. For this reason, betting points and offline casinos were closed. The world went online. But here’s the bad luck: sports events were also canceled. In fact, in the spring it was possible to make bets on Belarusian football (there were no cancellations of sports events in Belarus), e-sports (DOTA 2, etc.) and virtual sports (approx. Virtual sports – a simulation of a sports match in FIFA or NHL games). Users left to play online poker and virtual casinos – this is how the 21% increase in profits from the online market is determined.

Furthermore, partypoker’s 60% increase in NGR is driven by the same conditions. Revenues in the UK and European markets fell by 53% due to the pandemic. But the fact that casinos and bookmakers were closed did not stop users from playing. The decline in the offline market share caused activity in the online segment. Offline gamblers just went online.

In general, for GVC now, as well as for other entities in the market, troubled, uncertain times have come. On the one hand, the company is poised to seize market leadership in the states. On the other hand, this does not allow the epidemiological situation and post-coronavirus to actualize.

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Marina Taylor

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The last changes of the page “GVC Holdings Reports: Partypoker’s Net Income Increased by 60%” was made by Marina Taylor on August 20, 2020