World Cup 2018 Gives a Kick to the Portugal Market, but Will it Reach the Net?

Portugal took a step forward in Q2 thanks to the World Cup, but can they keep moving ahead?       

The Q2 Numbers

Portugal governing body SRIJ reports show online sports betting revenue reached €20.5m for the three months ending June 30, a major year-on-year jump from 2017’s €13.9m Q2 total and a healthy sequential gain from this year’s Q1 total of €17.4m.

With 13 licenses issued across 8 operators, the total reported customer registrations for Q2 came in at 103k, a 40k year-on-year hike from Q2 2017, with half of the new customers signing up by June in time for the World Cup tourney.

This activity boosted sports betting handle to €89.8m in Q2, a year-on-year increase of over €22m, but a sequential drop from Q1’s €100.3m.

Largest Earners

Football was the largest earning individual sport, taking 74.4% of Q2 wagers followed by tennis (14.2%) and basketball (7.2%).

As for verticals in Portugal, the online casino vertical occupied solely by SRIJ licensee Stars Group reported revenue of €16.8m for a €5.4m year-on-year improvement also representing a slight sequential jump from Q1’s €800k.

Portugal’s top online casino vertical remained slots, at 55.4% of Q1’s casino revenue; followed by poker cash games (15.3%) and tournament poker (5.1%) for a 20.4% combined poker share up from Q1’s 18.6%.

The poker gains are key metric because they reflect the groundbreaking liquidity sharing pool which Portugal PokerStars shares with France and Spain.

Government Friction

Though the government’s €16.9m Q2 take for online revenue represented a €3.6m year-on-year jump, there is a sense the gains could have been bigger.

A variable tax rate on sports betting capping out at a high 16% and stringent restrictions to international operators may be dicouraging more applications: the SRIJ has blocked a total of 237 domains across 302 foreign sites, forwarding the names of 11 violators to local prosecutors already “for the purpose of proceedings.”

New Entry

The main prospect is Spanish gaming operator Luckia, which has announced it will enter the market pending official confirmation.

Outlook

As a small economy with new regulation, it stands to reason that Portgual will have some troubel getting out of the gate. A windfall frorm the quadriannual World Cup needs to be supplemented by a less Draconian appearing approach to increasing local traffic.