Ladbrokes Revenue Fall Amidst Growth In Online Gambling
The company’s revenue in six months declined by 11 percent to £1.5 billion, and its gross profit fell 13 percent to £1.5 billion.
The prolonged lockdowns closed land-based casinos and other gambling facilities. Betting shops were among the land-based gambling facilities forced to shut down in March because of the novel coronavirus. The closure caused a 50 percent decline in retail revenue in the UK while the betting shops in Europe fell 48 percent in the first six months.
Online gambling rose because of the pandemic. The subscription to online gambling sites rallied because of the absence of casinos and sportsbooks. People shifted their attention to internet-related activities during the lockdowns imposed by governments. Experts projected massive growth in the industry by 2025.
Ladbrokes saw decline despite surge in online gambling revenue
GVC Holdings owns gambling brands such as CasinoClub, Foxy Bingo, partypoker, and PartyCasino, reported an increase in online revenues while people stayed in their homes because of the pandemic. The 31 percent increase in gambling boosted the 21 percent increase in online revenue.
The overall earnings dropped, but profits in online gambling before interest and other costs increased by 53 percent to £368.6. Shay Segev, the new chief executive of GVC, said the company performed well. In the first six months of the year, despite the unprecedented trading environment.
The performance of the company shows the it’s strength diversified business model and the expertise, adaptability, and dedication of its employees.
The company said they would not pay for the interim dividend due to the continuing uncertainty caused by the lockdowns and restrictions. However, the chief executive said the online business’s strong performance, the return of sports, and the reopening of the operations of retail stores would balance the industry this year.
The chief executive revealed that they are focused on expanding operations in the US and new markets.
GVC Holdings cancels interim dividend
GVC Holdings decided to cancel its interim dividend when the virus canceled sports matches, which caused the closure of betting shops. Ladbrokes Coral, GVC parent firm, said the increased gambling revenue lifted the decline in gamblers bets on sports events. The total net gaming revenue dropped to £1.62billion in the first six months of the year.
GVC and William Hill are moving towards expanding their operations in the US market to avoid strict regulations in Europe and the loosening legislation in the target market. US states are relaxing gambling laws as legislators see the potential of the industry in stimulating economic growth.
There are more than 18 US states that allowed sports betting while five have legislation for online casinos. The company believed that the US market is one of the biggest growth opportunities for the company.
The sports betting and online gambling sector of the US is estimated to be around $20.3 billion by 2025.
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