Surprisingly, online gambling firms also suffering during lockdowns

Online gambling
Photo by Tzogia Kappatou

(Reuters) – Online gambling firm 888 Holdings on Wednesday flagged growing risks of gambling-related harm as more stuck-at-home Europeans bet online amid nationwide lockdowns to curb the spread of the coronavirus.

The company did not give hard figures for its performance since the lockdowns took hold across Europe in March, but said that as a purely online operator, it was “confident” of managing the business challenges they present.

The company’s shares fell 7.2% to 132 pence in morning trade as it reported profits before tax more than halved last year, hit by almost $26 million in additional gaming duties it paid in heavily regulated markets.

Gaming companies have seen a mixed impact from the coronavirus pandemic, which has all but shut down one big cash cow – competitive sport – globally but is encouraging customers to play more poker and bingo to relieve boredom.

Playtech, the world’s biggest supplier of technology for online gaming operators, also said last month Europeans stuck at home were playing more online betting games.

Operating in an industry closely monitored by regulators, 888 said it was ramping up programs aimed at managing gambling addiction.

“With people spending more time at home and with increased levels of stress and economic uncertainty … we are proactively communicating with our customers to provide information on safer gambling and, where necessary, offer support,” Chief Executive Officer Itai Pazner said.

The company’s full-year pretax profit fell to $45.3 million compared to $108.7 million a year ago. Core adjusted earnings (EBITDA) fell from $107.1 million to $85.6 million.

“More customers at home creates the opportunity for a greater volume of recreational play. However, it also creates the risk of regulatory changes intended to protect consumers,” Peel Hunt analysts said.

“888 and other industry leaders have made it clear that they have adapted their approach to responsible gaming for the COVID-19 situation. However, this will be insufficient for advocates of regulatory change.”

(Reporting by Tanishaa Nadkar in Bengaluru; Editing by Saumyadeb Chakrabarty)

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