SBC News Voice of the Sports Betting Industry
Sports betting exchange and igaming operator Betfair are starting to reap the benefits of cost cutting implementations and that were sanctioned by senior management with a view of streamlining company operations that began at the start of 2013. Betfair implemented these measures after rejecting a £1 billion takeover by CVC Capital Partners in early 2013.
The publication of the company’s interim results saw company revenue fall by 13% to £90.4m in the three month to the end of July 2013. The Revenue fall reflects Betfair’s operational decision to pull out of German, Greek, Cypriot and Spanish betting markets, where the company faced strict regulatory measures or tax hurdles that would have affected Betfair’s net revenues. Other factors for the decline in revenues were the absence of major international soccer tournaments this summer which depressed football wagering on the Betfair Exchange.Although revenues decreased for the opening six months of 2013, however Betfair saw a profitability in the form of underlying EBITDA rose 16 per cent to £24.9 million in the quarter, aided by its cost cutting implementations, which saw the igaming operator shed some 500 jobs and decreasing its cost on workforce. The cost cutting measures hope to bring Betfair in line with UK gaming operators William Hill and Paddy Power, as Betfair looks to regain growth and market presence in the igaming sector.Chief Executive Officer Breon Corcoran commented on the results – “Betfair’s first quarter performance is in line with our plan and leaves us on track to meet our expectations for the full year. Betfair is focusing on Britain, Ireland, Denmark, Malta, Gibraltar and the United States and said revenues had grown by more than 10 per cent in these markets last month”.
Online gambling companies face a £300 million bill from December 2014 when Britain closes a loophole that has allowed companies to avoid taxes by basing themselves offshore in locations like Gibraltar. Mr Corcoran said Betfair could benefit if the tax meant smaller online players were unable to compete.“There could be market share gains. We see that as an opportunity,”
