With what is currently happening in the world, facing the coronavirus pandemic, the economy stagnates. Sports betting groups suffer significant losses due to the closure of the main sports activities on which they rely. Contrary to what happens, however, the STARS Group records record revenues for the first quarter of 2020. The Company notes a 27% increase, at the end of March, compared to the same period last year. The impact of the pandemic on the economy did not reach the group and here is why.
The Group's Online Sault and Poker option
Compared to its competitors, TSG is doing much better. Since 2019, the Group has to 62% of its revenues to its flagship poker stars brand and virtual casino operations. The group allows this crisis to withstand this crisis because it finds less dependence compared to sports betting. And this despite the fact that in 2018, the brand acquires the British giant of online bets Sky Bet. In early March, Poker activities and online TSG casinos are experiencing phenomenal growth. This corresponds to the beginning of the propagation of the pandemic and put in place social distancing measures. At this time, TSG notes a 44% increase in international revenues for both markets. According to the group, it was the help needed to mitigate the effects of the disturbance of the sports calendar. The group is even confident and believes that by diversifying activities related to these markets, it will continue to generate cash. In the end, the latter will help TSG to solidify its balance sheet and strengthen its position. Future harmful effects of COVID 19 should be perfectly overcome for the group. Adverse decor, however, is less attractive because such results for TSG could create a "perfect storm". Great bettors, obliged to respect social distancing measures, will seek compensation. However, the addiction and risks incurred are largely more dangerous with games like the online slot machine.
As said above, the share of revenues related to Casino Games and TSG poker was 44%. Starting from this postulate, the group's sports figures still had to be healthy for the result remains positive. It is indeed the case, because the company notes a margin of net gains in terms of sports betting. Comparative in the first quarter of 2019, that of 2020 is three times higher. In part, this has been due to the fact that world elite sports leagues have only begun to postpone their seasons than in mid-February. This leaves only two to three weeks maximum sports drought for the first quarter. Faced with these more than Encomeant results, Flutter Entertainment, Paddy Power's parent company, strengthens its willingness to partnership with TSG. This first should indeed acquire the Stars group during the year. A merger that will create the world's largest online game operator in terms of income. In the first quarter, Flutter also records a 16% increase, only this is not maintained as for TSG. Indeed, flutter begins to feel the effects of isolation. This translates into a turnover down from 32% between mid-March and mid-April. In addition, this may worsen later as Flutter shoots 78% of its sporting betting sales. Nevertheless, the merger of the two groups is not called into question.