It’s anything but business as usual in Italy as government officials have essentially placed a blanket over movement in the country. A lockdown has been ordered by Prime Minister Giuseppe Conte due to the coronavirus, which is forcing citizens and residents to stay at home and to only be allowed to travel after receiving permission. As a result, and as previously predicted by the company, Playtech is expecting major losses in the country and has decided to temporarily halt all operations in Italy until next month.
Playtech, which specializes in online gaming operations and technology, said in February that its revenue was going to take a hit in Italy and China as a result of Covid-19. Things already began to slow down as a result of the country-wide travel ban and the company announced this past Monday that it would close all of its shops in Italy until April 3, according to Gambling News. Playtech is the owner of Italy-based sports gambling firm Snaitech, of which it purchased a controlling 70.6% stake in 2018.
Italy has reported over 460 deaths caused by the coronavirus. In order to prevent the virus from spreading, the government ordered the temporary closure of certain public establishments, including arcade halls, bingo facilities, betting shops, cinemas, discos, pubs and gyms. Other activities, such as sporting events, weddings and funerals, were also ordered to be suspended.
The coronavirus has already taken its toll on global gaming operations, forcing estimated losses of between 1%-4%. This completely wipes out all gains the gaming ecosystem has experienced over the past three years, and recovery is already starting to get underway, but it’s going to be slow. Macau is already back up and running, albeit with a reduced footprint, and other regions, some of which are just starting to see an impact from the virus, are only just now beginning to feel the strain.
Playtech has definitely already experienced a hit from the coronavirus. It was on track for a strong 2019, initially reporting revenue growth of $1.7 billion, 23% higher than last year, and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) up 11% to $433.28 million. However, thanks to discontinued operations and tax liabilities, it was forced to report a $22.16-million loss for 2019. Absent a major and rapid shift in policy in Italy, Playtech’s 2020 performance could turn out to be even worse.
