Betfair results hurt by regulation

9Mar 2013

Betfair

Sportsbetting exchange and online casino operator Betfair has released its interim financial results for the three months to the end of January showing a four percent year-on-year drop in overall revenues to £90.5 million.

London-based Betfair revealed that revenues from its exchange business fell by six percent year-on-year to £56.3 million due to the continuing impact of regulatory developments in Greece, Germany, Cyprus and Spain while similar measures saw the firm record a decrease of eight percent in earnings from gaming when compared with the corresponding three-month period twelve months ago to £18 million.

On the upside, Betfair stated that exchange revenues in the UK from football for the three-month were ‘strong’ due to ‘more fixtures falling in the period’ and offset by a large number of racing cancellations due to poor weather conditions.

“Over 50 percent of our customers in the UK and Ireland placed a mobile bet in the period and the channel accounted for approximately 20 percent of exchange commissions,” read a statement from Betfair.

“Our mobile products have been enhanced through the introduction of integrated content and a notification service that keeps customers updated when goals are scored in their selected matches. The quality of Betfair Mobile apps continues to be recognised by industry observers and we retained our title of Best Gambling Company at the recent Mobile Entertainment awards.”

Betfair declared that sportsbook revenues for the three-month period increased by 39 percent year-on-year to £7.5 million due to ‘very strong margins following favourable football results’ while updates to the product designed to provide ‘a simpler product experience’ are currently being trialled.

“During the period, we also launched our new sportsbook specific iPhone app to complement the existing exchange app,” read the statement from Betfair.

“Take up has been encouraging and mobile accounted for over 40 percent of sportsbook revenue in January.”

Betfair additionally reported that revenues from the management of customer funds dropped by 54 percent year-on-year to £300,000 despite ‘slightly higher average customer balances’ due to lower interest rates.

“Betfair performed well in the third quarter and the business is on track against our full-year expectations,” said Breon Corcoran, Chief Executive Officer for Betfair.

“UK revenues were up six percent driven by the continued strength of mobile betting as well as favourable sporting outcomes. In line with our previous guidance, international revenues declined as a result of regulatory change and our focus on sustainable jurisdictions.

“Mobile revenues doubled in the quarter and the channel accounted for over 50 percent of activations last month.

“We are focused on delivering the plan we set out in December. The new leadership team is in place and has started to implement the changes required to make Betfair a more focused and leaner organisation.”