Leading sports betting giant William Hill has issued an urgent warning to its investors regarding the unprecedented effects brought about the covid-19 global pandemic. The cancellation of especially elite sports events is expected to play havoc on profit margins, said the UK sports betting giant.
GVC Holdings has joined William Hill in its analysis of the situation and said that whilst its not possible to gauge with absolute accuracy the effect that the spread of the virus will eventually have had on local markets, the expectation is currently that the state of affairs now prevailing will drive its EBIDTA down by as much as £150 million for the year.
William Hill on its part said that it expects to take a hit of at least £110 million, which is of course only marginally more positive a projection than that of the GVC group. Both parties seem to agree that the sports betting industry is in for an exceptionally tough ride over the course of the coming months.
Flutter Most At Risk Of All
The biggest UK betting players at the moment are William Hill, Flutter and GVC Holdings. Bet365 is right up there in the highest ranks too but what with the entity being a private company, It’s not required by law to publicly disclose its financial performance. The global cancellation of all major sports events literally has the potential to bring the UK betting market, a market considered as the biggest sports betting market in the world today, to its knees.
Even though GVC has said that it expects to be most affected of all of the big players, the reality of the matter is that it’s a much bigger company thanks to ongoing consolidations and various mergers and acquisitions actioned over the course of recent years. As such, even though 45% of GVC’s revenue income is dependent on sports betting wagers (as opposed to William Hill’s reported 53%), the fact that the company is bigger also makes it much better equipped to survive long-term lows. And even though 45% is not at all ideal percentagewise, it’s considered small fry when compared to for example Flutter. The latter owns Paddy Power and Betfair and is primarily a sports betting operator, with a very concerning 78% of its income dependent solely on betting on sports and on major events taking place on a regular and absolutely consistent schedule.
GVC Aware But Confident
GVC CEO Kenneth Alexander describes the group as being by no means oblivious to the challenges posed by the covid-19 outbreak. But even so, said Alexander, GVC remains confident in its ability to effectively manage the impact of the virus on the group’s operations. The priority is the protection of all of GVC’s employees whilst at the same time maintaining the group’s entertainment offer to its customers, concluded Alexander.
William Hill has in the meantime decided to follow a route similar to that recently announced by casino software giant Playtech, in that it has with immediate effect called a halt to all dividend payments to shareholders. This will go a long way towards the company being in a position to limit its losses and absorb the economic shock caused by the global pandemic.
The sports betting giant seemed resolved to survive and to trade another day, saying that its been around for 86 years and subsequently armed with a great deal of experience and customer-expertise and understanding. According to CEO Ulrik Bengtsson, what bettors want to do more than anything, is to bet. The only remaining challenge requiring a creative solution right now, is how to make that happen.