Playtech has stepped forward to deliver an update on their performance now that the economic impact of the COVID-19 coronavirus is becoming clear. With several verticals potentially facing impact, their reporting provides a pretty good picture of what the gambling industry is facing.
First, Playtech wanted to emphasize that regardless of what’s happening at the ground level, they are bearing for impact. “Playtech is working to protect its cash flow by pro-actively managing its capital expenditure and working capital as well as identifying opportunities for cost savings that will not impact the long-term success of the Company,” they noted.
With more people stuck at home than ever, online action is fairing pretty well. “Playtech’s Poker and Bingo businesses have seen increases in activity in recent days following the restrictions on physical movement put in place by various governments,” they note. But it might not last forever. “The Company believes there is a risk that player behaviour changes the longer the COVID-19 situation continues.”
They caution that live casino and live dealer offerings may be disrupted as more governments opt for a “Shelter in Place” solution. This has been the case in atleast one country. “Playtech’s facility in the Philippines has been closed with traffic being redirected to other facilities. While its facilities in Riga and other locations currently remain operational, there is a risk that these facilities will need to close in the future.”
Sports betting has taken a noticeable hit, as a lack of popular sports has just simply led to less bettor interest. And with Playtech’s B2B sports business being retail-focused, they expect a huge hit. “Playtech estimates this business will generate a loss of €4 million of adjusted EBITDA per month before mitigation.”
They also note B2C offerings are going to take a hit. Italian retail focused Snaitech is expected to take a loss of €3 million of adjusted EBITDA per month before mitigating actions. HPYBET also saw its German and Austrian locations close, resulting in a loss of €0.5 million adjusted EBITDA per month during the quarantine period. Sun Bingo has been unaffected so far in 2020.
TradeTech, which was struggling as recently as November, has actually seen increased performance with market volatility. It has generated adjusted EBITDA in excess of €30 million for 2020 to date, exceeding expectations.
