Betting giants warn on earnings as coronavirus hits sports schedule
16 March 2020, 16:34
Flutter said the Euro 2020 championships are likely to be postponed.
Some of Britain’s biggest betting companies have warned they face major challenges as sports matches and leagues are cancelled because of the Covid-19 outbreak.
Paddy Power owner Flutter Entertainment, which gets nearly 80% of its revenue from bets on sporting events, said on Monday morning its accounts will be seriously dented.
Hours later GVC Holdings, which owns Ladbrokes, and William Hill echoed the warnings.
All Premier League football games have been postponed in England until the beginning of next month, while the major leagues in Spain, Italy, France and Germany have been indefinitely suspended.
Horse racing is continuing, although behind closed doors in places, but many major sports have been suspended in the US. The Euro 2020 football championship is also likely to be postponed, Flutter said.
“This will obviously have a material impact on the revenue and earnings of the group,” it said in a statement to shareholders on Monday.
Flutter chief executive Peter Jackson said: “The challenge currently facing our business and the industry more widely is unprecedented in modern times.
“Our focus, first and foremost, is on protecting the welfare of our employees and our customers and we will leave nothing to chance in this regard.”
The companies said they do not know when regular sports schedules will start again.
But if restrictions are still in place by the end of August, and Euro 2020 is cancelled, Flutter’s full-year ebitda (earnings before interest, tax, depreciation and amortisation) will take a £90 to £110 million hit.
If horse racing fixtures are cancelled and its UK and Ireland betting shops are forced to close, this could cost the company another £30 million per month in ebitda.
Analysts at Jefferies had previously expected ebitda to reach £428 million in 2020.
GVC said its ebitda could take a hit of between £130 million and £150 million. This scenario includes Euro 2020 being postponed and all other football cancelled, Aintree and Royal Ascot race meetings being cancelled and other races being held behind closed doors, but UK betting shops remaining open.
William Hill suspended its dividend and said ebitda is expected to reduce by £100 million to £110 million.
“These are truly unprecedented times but William Hill has been around for 86 years and over that time we have gained huge experience and understanding of our customers,” said William Hill boss Ulrik Bengtsson.