Casino and poker ‘more than’ mitigates Stars Group’s sporting disruptions

Casino and poker has “more than mitigated” the disruption from the cancellation or postponement of sporting events as the Stars Group anticipates record revenue during the year’s first quarter.

The group, which suggests that its impending combination with Flutter Entertainment will close during the second quarter of the year, reported year-over-year revenue growth of 44 per cent across the verticals. A trend which the group states has continued into Q2.

Strong momentum across core segments has seen Stars expect to achieve $735m revenue from the year’s first quarter, a record amount and 27 per cent up from $580m the previous year.

This has been attributed to continued strong underlying momentum in customer activity in the United Kingdom and Australia and a sequential improvement in the international segment.

Operating income is anticipated to reach between $140m-$149m, up 113 per cent from $62m, adjusted EBITDA could jump a little over half to $291m-$297m with net loss pencilled in to finish up at $69m-$79m (2019: +$28m).

Acknowledging a rapidly evolving global climate and difficulty to predict the scope, timing and length of the current COVID-19 pandemic, lifting of restrictions and group-wide impacts, Stars does suggest that offerings “may” become adversely affected should significant prolonging ensue.

The Stars Group currently estimates that each month that horse and dog racing and major sporting events are cancelled operating income will reduce approximately £10m-£15m in the UK, and AU$10m in the Australian segment, with no material negative impact on the International segment.

“We saw record revenues in the first quarter with 27 per cent year-over-year growth and are continuing to see strong momentum into April, with strong growth in poker and gaming revenues helping to mitigate the cancellation of sporting events,” explained Rafi Ashkenazi, CEO of The Stars Group.

“With these encouraging trends, a well-diversified and cash-generative business, and our strong balance sheet, we believe that we remain well-positioned to navigate further headwinds related to the COVID-19 pandemic in 2020, and remain fully committed to our combination with Flutter, which we now expect to close in the second quarter and are confident will enhance and accelerate our growth strategy. 

“During these exceptional times, our top priority, however, is the health and safety of our employees and customers, which includes enhancing our responsible and safer gambling measures as well as ensuring that we provide our customers with all the help and support they may need.”

Reinforcing a commitment to safer gambling the group has further increased its investment and focus by encouraging customers to take advantage of its various safer gambling tools, such as setting deposit limits, using cool-off periods and using ‘reality checks’ where available.

Furthermore, the group is also striving to intervene where customer data suggests a heightened risk of harm, setting mandatory deposit limits or otherwise restricting gameplay. Stars is also supporting its range of free-to-play games for customers to enjoy during these challenging times.