‘Summer of sport’ boosts Betfair’s Q1, but poker, casino fall and CFO quits

TAGs: Betfair, Euro 2012, Olympic games, Stephen Morana

betfair-revenue-summer-sportRevenues at betting exchange Betfair rose 13% to £91.6m in its fiscal Q1 ending July 31. boosted by a ‘summer of sport’ that included the Euro 2012 football tournament, the Summer Olympic Games in London and Andy Murray’s Wimbledon final. Sports betting revenue outperformed Betfair’s overall growth, rising 21% to £72.3m, with Euro 2012 accounting for £7.8m of that total. The number of Olympic bettors doubled from 2008, with 19k punters placing a wager on the men’s 100m final. Murray’s Wimbledon loss to Roger Federer attracted £58m in wagers, making it Betfair’s biggest ever market until Murray’s US Open triumph against Novak Djokovic on Monday night topped it with a £63m handle.

While sports ruled, Betfair’s casino revenues fell 7% to £13.7m and poker fell 4% to £5.1m, declines the company blamed on “regulatory factors” in Italy, Cyprus (over which the company just filed a complaint with the EC) and Spain, where the company is still waiting for legislators to give exchange betting their official stamp of approval. Until remedied, the Cyprus and Spain situations are expected to cost Betfair £1.5m in monthly revenue. Then there’s the ongoing uncertainty in Germany, where Betfair holds a license in Schleswig-Holstein that is of dubious value as S-H prepares to join the other German states in signing on to the new interstate treaty and its 5% turnover tax – which Betfair says will make its exchange model “unviable.” Betfair derived 4% of its FY 2012 core revenues from the German market.

Betfair increased its number of active customers by 13% to 485k in Q1, and average revenues per user remained stable at £188 (compared to £186 last year). The number of mobile betting wagers grew by 114% to 15.8m and Betfair’s mobile revenue rose 98% to £8.2m, reflecting the first full quarter in which Betfair’s mobile casino was available. Half of all Betfair’s UK and Irish customers placed a mobile wager in Q1. However, Betfair warned that Q2 has started slowly, with revenues off 2% since the end of July, reflecting the close of the Olympics and a ‘slow start’ to the new football season.

Betfair CFO and former interim CEO Stephen Morana used the earnings conference call to announce he would be leaving the company once a suitable replacement could be found. Last November, the 10-year Betfair veteran was passed over for as permanent replacement for CEO David Yu, a gig that ultimately went to ex-Paddy Power man Breon Corcoran, who officially took the helm in August. Morana said the decision was a difficult one, but felt the time was right for moving on. Betfair shares lost 8p on Tuesday, closing at 740p.


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