One of the UK’s largest bingo operators, GVC Holdings PLC (LON: GVC) raised their profit forecasts this week, primarily through growth in the online gambling market and expansion in the US.
GVC Holdings PLC (LON: GVC) who own popular bingo brands such as Foxy bingo, Ladbrokes bingo, Bwin and Coral bingo raised its full-year core earnings forecast for the second time in just three months. The Isle of Man-based gambling giant is now saying its full-year core earnings will come in somewhere between £670 million and £680 million.
Fixed Odds Betting Terminals and Over the Counter Sales
The big fear that the restrictions placed on the FOBT (Fixed Odds Betting Terminals) would cause a big dent into the profits appears to have been a misplaced fear. The machines had been a major force in UK high-street gambling revenues over the last 20 years. However, in April, the maximum stake on FOBT permitted was lowered to £2 from £100. The updated profit forecasts from GVC reveal that revenue from the machines dropped by 36%. However, net gaming revenue from over-the-counter betting shops in the UK rose by 7% from the same time last year.
GVC did close 41 shops in the quarter and there are still plans to close a further 900 betting outlets over the next two years. Online betting told a different story with online bets related to sports increasing 5% in the period, providing a boost to net gaming revenue which rose by 16%.
US Expansion and Online Growth
in 2018, GVC Holdings PLC (LON: GVC) made a £4 billion acquisition of the Ladbrokes Coral group, making it one of the biggest gambling groups in the world. As well as Ladbrokes Coral, GVC also owns well-known brands including Crystalbet, PartyPoker, Bwin and Eurobe. The firm has licences to operate in over 20 countries including the US. The launch of its online sports betting and gaming app BetMGM app in the US has seen what GVC describes as an “encouraging start.”
However, GVC’s European retail stores performed weaker than those in the UK, with net gaming revenue falling by 4% as both margins and wagers declined.