Most, if not all news reports these days seem to be linked to the spread of COVID-19 and the measures taken to stop or delay it. Multiple industries have been affected and we already covered sports events and how they have been disrupted. It goes without saying that if sporting events are disrupted, then so will be sports betting operations.
Flutter Entertainment earn most of their revenue from sports betting
Some betting operators have already started calculating the impacts of the cancellations and the hit that their revenue will take in the upcoming period. Flutter Entertainment, company that was previously called Paddy Power Betfair, was the first to release its estimated earnings, i.e. the impact of the cancellations of various sporting events.
The company has made the news on a number of occasions in the past year or so, starting with the decision to change its name, followed by a number of reports on their marketing and marketing-related activities, such as this marketing ploy, but this time we are focusing on something that will have a rather negative impact on the company and the way they do business.
The company has already stated that the cancellation of sports events, both in the UK and out of the country will have a tremendous effect on the company’s revenue and profits. Their base this expectation on the fact that the company generated over three quarters of its revenue from bets placed on sports and sporting events. As most major events have already been cancelled or postponed, it is to be expected that most of the expected revenue will not be yielded.
Fringe sports events will keep the industry afloat
On the other hand, some of the events have not been cancelled outright, but are expected to take place behind closed doors, without audience and spectators, which means all of these events will still be available to punters. Yes, the most attractive events will not take place, but people who would like to place wagers would probably opt in to bet on some of the less popular events.
For instance, there are plenty of sports events in Australia, as well as Irish horse racing events which are going to take place.
Based on the assumption that these events are also cancelled, including all other events until the end of August, then we can expect the EBTIDA for Flutter Entertainment to fall by £100m more or less.
The company CEO, Peter Jackson stated that the challenge that the business and the industry as a whole are facing is unprecedented and unwitnessed in modern days.
It is pretty clear that the industry will need to adapt to the new situation, although it is not exactly clear what might be done to alleviate the situation if all, or most events are cancelled. Still, it is difficult to imagine that literally no sporting events will take place. While there might be less interest among punters, even a decreased level of activities will allow operators to maintain at least some level of operations and activities and keep them afloat in these difficult times.