In recent times there’s been much discussion about the extent to which any uptick in casino revenues is able to compensate for the drastic fall in sports betting caused by the novel coronavirus (Covid-19) pandemic.
For operators, it’s clear that even if some bettors have moved into other verticals, there’s still a huge gap in their profits.
But as the recent numbers put out by affiliates show, this sector of the igaming industry seems to be faring much better.
With most of the big affiliates making the majority of their income from casino anyway, the impact of Covid-19 has been less negative for them than it has been for operators. Early numbers from April show some affiliates might even have benefited from the situation.
But the pandemic is taking a toll on the more sports-focused affiliates such as Better Collective. And even those affiliates that are more casino-focused have been taking action to protect themselves from the effects of the pandemic, with many expecting its full effects won’t really be felt until later in the year.
One theme evident from the first quarter is the need to manage debt levels, with Catena Media, Gaming Innovation Group and Net Gaming Europe all restructuring their finances.
It’s not just the pandemic leading affiliates to take steps to protect their businesses; the recent Google algorithm changes continue to cause headaches for affiliates, most notably XLMedia.
Interestingly, the actions taken by affiliates to overcome both of the sector’s big issues have resulted in something of a split among the big players when it comes to paid media. Some are investing more heavily in the discipline, while others are withdrawing from it altogether.
It will be interesting to see how this divergence continues to develop when second-quarter results become available, which of course will be eagerly awaited because they will provide a clearer picture of the impact of the pandemic on affiliates.
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Editorial director, iGB
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