Sky Betting & Gaming Q4 revenues down 9% against tough comp period
Betting revenues fall by 21% as gross win margin drops from 14% to 10%
Sky Betting & Gaming has posted an 8.8% decline in Q4 revenues to £176m, thanks to normalisation of margin after an exceptional Q4 2017.
Margin in the quarter fell from 14% last year to 10.1% – still ahead of long-term expectations – meaning betting revenues were down 20.5%, despite a 10% increase in stakes.
The firm fared better in gaming where revenues climbed 17% to £65.7m thanks to growth in QAUs and the continued roll-out of “innovative content”.
QAUs across the business rose 17% to 1.9 million, with Sky Bet and Sky Vegas continuing to lead the mark in customer numbers, according to the firm.
Poker revenues fell 12% to £2.4m, while adjusted EBITDA from the business fell 28% to £55m.
Parent company The Stars Group (TSG) stressed the dip was in-line with expectations and hurt by the win margins and investments to increase QAUs.
Stars said it was on track to deliver the full $70m in cost synergies from the acquisition within the current year alone, with “potential opportunities for incremental synergies under review”.
The numbers were reported today alongside Stars’ FY18 report, where the core business saw Q4 revenues dip 1% to $356m.
Poker revenues were down 4%cc to $224m, while gaming climbed 29%cc to $118m and sports climbed 5%cc to $23m.
“2018 was a landmark year for the company,” said group CEO Rafi Ashkenazi.
“We completed the acquisitions of Sky Betting & Gaming in the UK and BetEasy in Australia, extended our licensed footprint to 21 jurisdictions around the world and began laying the foundations to grow our presence in the US.
“Our international business saw strong organic growth in the year despite restrictions in certain markets and lapping the initial roll-out of our Stars Rewards program. “Our United Kingdom and Australia segments both performed in-line with our expectations during the fourth quarter, and we believe they are currently well-positioned to continue gaining market share in 2019,” said Ashkenazi.
Full-year group revenues hit $653m, with adjusted EBITDA of $239m.