Sky Betting & Gaming profits down 31% as poor sports results bite
Sky Bet revenues down 5% year-on-year in Q3 as Big 6 Premier League teams win 80% of their games
Sky Betting & Gaming (SBG) has posted a 31% decline in profits for the third quarter of 2018 after the operator was hit by poor football results and major marketing investments around the start of the new season.
Adjusted EBITDA for the quarter was £28.8m compared to £41.9m in the same period last year, as betting net win margin slipped from 9% to 7.3%.
The adverse results also meant sportsbook revenues declined 5% to £78.5m, although stakes were actually up 17% during the quarter.
Per Oddschecker data, favourites won 61% of Premier League games compared to 50% last year, while the Big 6 won 80% of games they were favoured in, compared to 69% last year.
The percentage of draws also dropped 8pp.
The figures were reported yesterday by SBG parent company, The Stars Group, which said the recreational nature of the SBG customer base meant margins were more prone to fluctuations.
“Stars has learnt the hard way that sports betting is materially more volatile than gaming,” said Regulus Partners analyst Paul Leyland.
Elsewhere, SBG gaming revenues were up 16% and quarterly active uniques (QAUs) were up 23%, reflecting the marketing spend around the start of the football season.
Poker revenues declined 5% to £2.5m.
Stars said yesterday the integration of SBG was underway, with approximately $5m of synergies expected to be achieved before the end of the year.
The firm said 53% of the projected $70m synergies would come from headcount and other staff costs, 23% from purchasing costs and 24% from other cost savings.