Despite Revenue Hits, Provider Giant Playtech's Model Proves Resilient Through the 2020 ShutdownsPublished October 5, 2020 by Lee R
It appears Playtech will recover fast from the Covid shutdowns.
Gaming solutions provider giant Playtech's reporting of the impact of Covid gives the industry key profile information on a major player.
H1 2020 Impact
The hit from the Covid period to Playtech came in at a reported 22.5% year-on-year decline in revenue for H1 2020, with Corona most impacting the company's B2B and B2C operations.
H1 Revenue for 2020 dropped to €564.0m (£513.0m/$664.6m).
B2B and B2C Drop
A strong performance from its financials division TradeTech nonetheless could not offset a 13.5% drop in B2B revenue, and a more significant 41.0% drop in B2C.
These totals reflected a substantial drop in gambling revenues, down 30.8% after accounting for €6.5m in inter-company eliminations to reach €476.7m, with B2B contributing €229.7m and B2C contributing €253.5m.
Reasons for Reduction
Playtech specifically attributed the B2B revenue decline to the slowdown prevention measures of all retail activities worldwide, with B2B revenue decline at 54% driven by a decline in Asian revenue.
The Asia Factor
Playtech's Asia market declined 35% on a constant currency basis due to Covid.
Adjusting for Losses
Despite the negative impact of two key drivers Asian revenue and H1 2019 hardware sales comparisons, B2B gambling revenue proved resilient, by otherwise remaining flat year-on-year; and constant currency rising 2%.
Further, in this period where sports betting declined due to a dearth of events to bet on, Playtech reports that online verticals saw strong growth.
Playtech's online casino business division expanded with 50 new brands, while enhancing existing prominent brand partnerships with current big name clients including GVC Holdings and Playtech's first US client bet365.
Individual strong performing verticals during the disruptions for Playtech included bingo and poker, with drivers of growth being the growth of Playtech's poker network in signing 19 brands, including many seeking a lifeline after competitor provider Microgaming shut down its entire network.
Sports Betting Comes Back
Further, now that sports betting has returned, Playtech reveals that revenue has re-stabilised to surpass prior year levels.
The Playtech figures effectively take into account mitigating factors to give the industry a true perspective on how much Covid may have affected key players under the surface, and is a salient reminder of the stabilising factor that the online medium provides in times of adversity.