The effect of the cost of living crisis and affordability tests on the gambling sector will become more apparent this week as three of the industry’s giants release their financial results. in the first six months of the year.
The announcements come amid falling stock prices of three companies – Entain, Flutter Entertainment, and 888 – and uncertainty caused by continued delays to the publication of their gambling white paper. government.
The British racing board will also examine figures that suggest that online betting revenue on horse racing has declined since April and are concerned that pressure from the Gambling Commission on operators to impose affordability checks in advance of the white paper is one of the reasons.
Entain, the parent company of Ladbrokes and Coral among others, will be the first to release its figures on August 11, although the City won’t expect many surprises with the profit warning the house Executive launched last month.
The company said its online revenue will be flat this year after being hit by tougher economic conditions and affordability measures.
Analysts are told those measures have had a “significant impact” on figures in the UK, while per capita spending has begun to decline in April.
Flutter, the parent company of Paddy Power, Betfair and Sky Bet, will publish its interim results 24 hours after Entain, last updated the market in May as it revealed online revenue in the UK and Ireland had fallen. 20% in the first quarter.
At the time, chief executive Peter Jackson said the cost-of-living crisis had yet to have a tangible impact but he said there was “no doubt” that rising prices would affect guest spending. row.
Flutter said the safer gambling measures the company had put in place over the previous 12 months resulted in a £30 million drop in revenue in the first quarter.
Still, stockbroker Goodbody analyst David Brohan, looking at the August 12 results, said: “The white paper delay is futile for industry sentiment, however, the measures are The preemptive action the group has taken has put it in a good position.
“Flutter is increasingly focused on entertainment and we think it will be relatively resistant to recessionary pressures.”
888 will also release interim results on Friday, the first since it completed the acquisition of William Hill’s non-U.S. business this year.
When the company issued a trading update at the end of June, it said that both William Hill and business 888 were affected by safer gambling measures during the first half of this year.
888 has a much smaller footprint in the burgeoning US gambling market than its two larger rivals. Flutter and Entain are two of the main players through FanDuel and BetMGM respectively.
These two businesses are the main drivers of growth for their parent companies, Brohan said.
Share prices of both Flutter and Entain have fallen about 25% since the start of the year, while that of 888 have halved during the same period.
