Marketing investment boosts bet-at-home revenue in Q1

Betclic Everest Group subsidiary bet-at-home has reported an 18.8% year-on-year increase in net gaming revenue for the first quarter of 2019, with the operator crediting marketing efforts for the growth.

Turnover for the three months ended March 31, 2019 rose 12.7% to €827.3m (£713.9m/$923.2m), comprising €684.3m from online gaming, and a further €142.9m from sports betting.

Customers won €790.0m over the quarter, leaving gross betting and gaming revenue of €37.2m, up 12.1% from Q1 2018. An increase in betting fees and gaming levies to €5.3m was offset by a significant reduction in Value Added Tax on electronic services – down 55.6% to €850,000 – left net revenue of €31.1m.

Over the quarter the operator reported a rise in expenses, with personnel costs up 5.6% to €4.6m, and marketing costs rising 6.9% to €8.2m. The bulk of marketing spend went on bonuses and player vouchers, which accounted for €3.2m (38.5%) of the total, followed by advertising costs of €2.1m. The marketing investment helped grow customer numbers 4.1% to 5.1m as of March 31, 2019.

This increased investment in marketing was to continue throughout 2019, bet-at-home said, with TV advertising, print and online media, bonus promotions and sponsorship agreements to be used to raise brand awareness.

Coupled with other operating expenses growing 21.2% to €6.0m, this left earnings before interest, tax, depreciation and amortisation of €12.7m, a 35.6% year-on-year rise.

Once amortisation and depreciation-related expenses of €460,000, plus €24,000 in finance costs were stripped out, bet-at-home posted a pre-tax profit of €12.2m. After income taxes of €4.4m (up 33.8%), the operator’s net profit for the quarter was up 35.4% at €7.8m.

“The results for the first quarter of 2019 reflect the success of the targeted marketing investments in the financial year 2018, as gross betting and gaming revenues as well as all key earnings figures increased significantly year-on-year,” the operator’s chief executives Franz Ömer and Michael Quatember said.

Despite the first quarter growth, the operator anticipates a fall in gross betting and gaming revenue in 2019. This, it said, was largely due to legal uncertainty in the Swiss market, where the igaming market is to be restricted to offerings launched by the country’s land-based casinos.

As a result gross revenue for the year is projected to fall between €130m and €143m, with EBITDA expected to come in between €29m and €33m.