Greece-based lottery and gambling company Intralot had high hopes for a strong 2020. As it was coming off a weak 2019, it looked toward this year as its turn-around year, ready to capitalize on the growing sports gambling market in the U.S. and several lucrative (albeit questionable) deals with states. However, the coronavirus has had different plans for the company, and the first quarter of the year has been anything but productive. Adding to its problems, Bulgaria pulled the plug on a sportsbook contract that led to Intralot losing an important B2C segment that it had managed through a partnership with Eurobet Bulgaria. So far, 2020 is not shaping up to be the breakout year for the company.

Intralot has published (in pdf) its first-quarter revenue health, and the numbers are way off what it had hoped. In Q1 of last year, the company reported turnover of around $218.34 million, but could only muster $115.39 million in Q1 of 2020. This represents a massive 47% drop year-over-year, and follows a decline that was seen in all of 2019. 

This past February, Bulgaria suspended Eurobet Bulgaria for not playing by the country’s newly updated gambling rules, which led to Intralot taking a hit to its bottom line. This was the main reason for the decline, but not the only one – the vacated U.S. market hasn’t helped, and the closure of Intralot’s operations in Turkey last year have also caused gaping holes in its earnings capabilities. Scientific Games was awarded a new sports gambling tender in the country in the first quarter of 2019, leaving Intralot high and dry. The company explains, “Turkey revenue decrease is driven by Inteltek’s contract discontinuation post August 2019, as well as by a decline in Bilyoner’s top line performance following the transition to the new Sports Betting era in Turkey)… Performance in Euro terms was further impacted by the devaluation of the local currency (10.3% Euro appreciation versus a year ago…).”

Adding to the problems, the company has seen weaker lottery sales. The segment dropped 15% during the first quarter of the year, leading Intralot to be able to report just $77.08 million in sales. Operating expenses have been reduced, but not nearly as much as they need to be. The company cut its spending by 18%, saving it $6.78 million, but its EBITDA (earnings before interest, taxes, depreciation and amortization) dropped by 50% to $16.93 million.