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Costs and Disrupted Markets Cause the Stars a loss of $52 Million

The Star Group, an online gambling operator, lost almost $52 million in its Q3 as it incurred more costs and generated less revenue.
Numbers posted this past Thursday by the Canada-based, U.S listed The Star Group indicate the company posted a revenue of US$622.5 million in the three months leading to September 30th, year-on-year, which is a 9 percent rise. However, increasing expenses caused operating incomes to fall by more than 77 percent down to $16.3 million. The company also registered net earning loss worth $51.7 million against $9.7 million profit in the same period last year.

On a product-by-product basis, the company’s flagship, PokerStars, reported a revenue drop of 10.7 percent down to $19.2 million. Its exit from Switzerland’s market, as well as payment blocking within black/grey markets such as Russia and Norway, were some of the areas to blame for the dismal performance.

Gaming revenues did much better, rising by 7.5 percent to reach $194.6 million. Betting posted the biggest gain of 37.7 at $218.2 million, which reflects a whole quarter contributed by the U.K’s Sky Betting and Gaming, which TSG bought on the 10th of July, last year.
On a geographical basis, the Stars’ international market had a 7.7 percent drop in revenues down to $325.5 million. Poker declined by 10.8 percent down to $190 million.

U.K’s SBG business posted revenue worth $227 million, which represents a rise of 35 percent, while the sports betting stake went up 12.6 percent. Betting margins rose by 2.4 points up to 9.4 percent, which pushed revenues up by 52.6 percent, representing a $130 million rise.
TSG has not said much about its newest U.S-facing firm Fox Bet, a joint venture they are undertaking with Fox Sports. It launched real money betting within Pennsylvania and New Jersey in its Q3. Due to a pending merger with U.K’s Flutter Entertainment, Executives at TSG did not hold earnings call this quarter.

Source: https://calvinayre.com/2019/11/07/business/the-stars-group-52m-loss-rising-costs/

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About the author

Catherine Wambui

Catherine Wambui

Catherine Nyaga is a freelance writer covering Real Estate and Technology. Her other interests include Nature, pets and accounting. She recently graduate from Nairobi University with a degree in Accounting.

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