Malta-licensed Angler Gaming outperformed all online gambling rivals in revenue growth during the second quarter, but US-facing DraftKings and FanDuel are the best bets for future growth.
The COVID-19 pandemic took a significant toll on operators’ activity levels, but Online Gambling Quarterly’s latest report indicates a slim majority (51%) of operators now believe that they ultimately “got used to” the situation, and things were now “more or less” running smoothly again. Only 17% said COVID-19 remained “a big challenge” for their daily work activity.
Eternal optimism abounds, as the percentage of operators who believe the business climate was ‘poor’ fell from 36% in March to just 12% in September, while those who rated the climate ‘good’ rose from 19% to 33%. Nearly half (49%) expect the situation would be ‘good’ one year from now. (Tune in next year, when we report on the number of operators who’ve been forced to eat their junior staff as the pandemic’s ninth wave disrupted food supply chains.)
PANDEMIC WINNERS
In the three months ending June 30, Betsson subsidiary Angler Gaming enjoyed 73% revenue growth compared to the same period last year, dramatically outpacing the market average of 9%. Runner-up Scout Gaming rose a comparatively modest 58% from Q2 2019, while technology suppliers NetEnt ranked third with 37%.
At the other end of the spectrum, Germany’s Zeal/Tipp24 saw its Q2 growth decline 41% year-on-year, narrowly edging out runner-up Enlabs (-37%), while Newgioco ranked third on this ignominious list with -23% growth.
Zeal/Tipp 24 scored much higher on the quarter-on-quarter chart, placing third with 28% – seven times the market average of 4% – although this was largely due to “exceptionally low” revenue in Q1. Churchill Downs Inc (CDI) posted the largest quarter-on-quarter growth rate at 80%, thanks in part to US racing’s traditionally slow Q1 period, but also due to a particularly strong showing by CDI’s online advance deposit wagering site TwinSpires.
On a sector-wide basis, Q2’s sports betting revenue fell 42% year-on-year, with GVC Holdings’ betting brands performing best by limiting their decline to a mere 6%. On a sequential basis, average betting revenue fell 44% from Q1 with Flutter Entertainment’s PPB Online division considered a star for limiting its decline to 34%.
Average online casino revenue enjoyed 29% year-on-year growth, with Angler again out front with a 73% improvement and Italian operator Sisal up 54%. On a sequential basis, online casino revenue improved 17%, with Kindred Group and LeoVegas taking point with 33% growth apiece.
THE FUTURE
Looking ahead, DraftKings is the consensus opinion for enjoying the largest revenue growth over the next year. Flutter Entertainment’s US-facing FanDuel operations were a close second, and Flutter’s PokerStars narrowly beat out UK online betting giant Bet365 for third place. Flutter’s Paddy Power and SkyBet brands ranked fifth and sixth.
Despite Flutter’s domination of the above forecasts, analysts tagged Flutter with the highest number of ‘worst’ recommendations during Q2. That may have something to do with the company’s retail operations, as analysts rated online-only operators as more likely to outperform their hybrid rivals.
Naturally, this view is contrasted by actual share price performance charts, which showed online/retail operators up an average of 36% in Q2 while online-only operators rose only 13%. William Hill led this hybrid charge with 75% growth, while Aspire Global was the best online-only performer at 58%.
Mobile sports betting was tipped as having the greatest growth potential over the next year, followed by mobile casino and live betting, although live betting scored highest (+9%) compared to the industry’s view of the field in June.
