Stuck-at-home Britons provide boost for online casino companies
Britons stuck at home due to the coronavirus outbreak are hitting the online casinos, providing a boost for operators of virtual games such as blackjack and roulette.
888 Holdings Plc said Tuesday it’s seen increased customer activity in the casino and poker operations that make up the majority of its revenue, echoing comments made on March 19 by gambling-technology firm Playtech Plc.
The “encouraging” update from 888 reinforces the view that gambling companies can mitigate losses arising from the cancellation of sporting events, Gavin Kelleher, an analyst at broker Goodbody, said in a note. 888 got about 15% of revenue from sports betting in 2018.
888 stock soared as much as 38% Tuesday, the most ever, paring a plunge that followed widespread postponement of sports from soccer to horse racing as well as broader concerns about the virus’s impact on the economy. The shares are down 33% in the year to date, much less than the 77% drop for bookmaker William Hill Plc, which relies more on sports.
Among 888’s closest peers, Gamesys Group Plc has risen about 32% since the firm said March 17 it’s seeing “good momentum across the business.” But despite Playtech’s comments, its stock is down about 56% over the past month.
Peel Hunt analysts Ivor Jones and Douglas Jack warned last week that Playtech’s live casino operation requires a large number of employees to be in the same place at the same time, operating tables that are streamed to people playing online. The U.K. announced a ban on all unnecessary movement of people for at least three weeks on Monday.