Betfair Narrowing Focus To Regulated Markets
The strategy of focusing on regulated online gambling markets is one that we are seeing more and more from gambling companies. Only a few days ago we reported on bwin.party who have also adopted the approach of dropping weaker markers and focusing on fewer but stronger markets.
Betfair has just released their quarterly revenues where they reported a 13% decline in quarterly revenues. This again was due mainly to their strategic decision to focus on smaller more regulated markets.
Profitability in the form of underlying EBITDA rose from 16% to 24.9% in the three months to the end of July to reach $38.9 million. Like bwin.party, Betfair is also looking to increase revenues by adopting major cost saving measures. Their newly appointed chief executive Breon Corcoran has declared his intention to cut £30 million as well as to retreat from markets where tax rates are excessively high.
Corcoran was pleased with the results and said,” Betfair’s first quarter performance is in line with our plan and leaves us on track to meet our expectations for the full year.”
This policy of cutting costs and focusing on more profitable markets seems to be paying off for Betfair as the shares were up to 992p which was above the 950 pence per share they were offered in a takeover bid of $1.5 billion in May by private equity firm CVC Capital Partners. Keeping it “ean and mean” is what seems to be the winning strategy for online gambling companies who are facing growing competition in saturated markets.