Monthly Archives: April 2019

Evolution Gaming passes ‘go’, collects 73% more profits

Live dealer casino specialists Evolution Gaming are the gift that keeps on giving, at least, in terms of its shareholders.

On Thursday, the Stockholm-listed Evolution turned in its Q1 financial report card, which showed revenue rising 54% year-on-year to €79.3m. Earnings were up 64% to €35.9m as margins improved by nearly three points to an obscene 45.3% while profit spiked 73% to nearly €28.6m.

Evolution explained its boffo performance by saying it was the result of “good leverage from investments made in 2018,” as well as the rollout of new games and the launch of live casino operations for a number of new customers, including DraftKings, Loto-Quebec and Sweden’s state-owned Svenska Spel and ATG.

Evolution’s expanding operations in North America – with studios in New Jersey and British Columbia – caused a shift in the company’s geographic revenue split. The ‘Rest of World’s share over the overall revenue pie was up seven points from Q1 2018 to 29%, while the UK’s share dipped four points to 13%, the Rest of Europe slipped three points to 49% and the Nordics held firm at 9%.

Churchill Downs revenue soars despite California’s dead horses

Casino, betting and online gambling operator Churchill Downs Inc. (CDI) reported soaring revenue in the first quarter of 2019 following its year of brick-and-mortar acquisitions and the launch of a pseudo-slots business.

Figures released Wednesday show CDI generated revenue of $265.4m in the three months ending March 31, a 40% improvement over the same period last year. Earnings were up 52% to $74.6m but net income fell to $11.6m from $182m in Q1 2018.

Lest anyone panic, it bears mentioning that Q1 2018’s profits were artificially boosted by $168.3m via the sale of CDI’s social gaming unit Big Fish Games to Australia’s Aristocrat Leisure Ltd.

CDI has traveled a long way since its days as a pure racing operator, so the company has restructured its financial reporting into three new segments: Churchill Downs (pari-mutuel wagering at Churchill Downs Racetrack and historical racing at Derby City Gaming), Online Wagering (the TwinSpires advance deposit wagering site plus online sports betting and iGaming), and Gaming (land-based casino and jai-alai operations). Past results have been recalculated to reflect this realignment.

NetEnt struggling to adjust to Sweden’s regulated market

Online gambling technology providers NetEnt are the latest to report declines in revenue and profit due to challenges in adjusting to Sweden’s new regulated market.

On Thursday, the Stockholm-based NetEnt reported revenue of SEK418m (US$43.8m) in the three months ending March 31, a modest 2.8% decline from the same period last year. Earnings improved 7.7% to SEK196m as margins gained nearly five points to 47%, but operating profit dipped 6% to SEK126m and net profit was down 10.5% to SEK120m.

In mid-February, NetEnt reported that its game win was off 5% since the January 1 launch of Sweden’s new regulated online gambling market, and the company said Thursday that its Nordic markets “accounted for almost the entire slowdown [in Q1], mainly due to lower volumes in Sweden.”

NetEnt said the gambling taxes paid under Sweden’s new regulatory scheme lowered its overall revenue by 2% in Q1, but the changes also “impacted our customers and players to an extent that we had not foreseen.” (NetEnt isn’t alone in having difficulties adjusting to the new Swedish reality.)