We alluded in a recent article to the fact that gaming is a sector which can be both feast and famine when we noted Playtech’s rising fortunes.
And just to demonstrate the reality of this, Paddy Power, who almost never seem to be out of the news, have posted losses for the same period (first half of 2014) that Playtech saw their revenue grow.
Actually Paddy Power didn’t make a loss, but rather their profits have contracted, by 20% - quite a substantial figure, though not one that’s going to see them go out of business you might think.
And the first half of the year, which saw a fall y-o-y to 60.1m from 75.4m, does not mean that revenue at Paddy Power fell too. In fact that saw a 4% rise.
But what’s intriguing about these developments is that it seems that the house really has been (temporarily) beaten.
The fall in profits is not down to a lack of custom, but a series of sports results which have made a dent in Paddy Power’s bank account and presumably pride too.
Their sports betting sector took a hammering during the recent football World Cup, with the lack of upsets in the earlier group games in particular meaning that Paddy Power had to honor a lot of cautious bettors who’d bet on the favorites.
We’re mostly talking about the UK side of the business here, although the company’s Italian arm, for example, also suffered - experiencing 8.9m losses, notwithstanding the fact that revenue increased 126% during that time.
It’s not all bad news for the Irish site with the controversial promos — they have their PP Vegas mobile-led casino in the offing, as well as new Bingo products too, and they’ve seen operating profits go up in the UK, with the Fixed Odds Betting Terminals (FOBTs) revenue reportedly rose by 43% to 42.9m, though of course that side of the business might be subject to legislative constraint  in the fullness of time.
In fact, legislation, as opposed to a run of predictable sporting results, might prove to be Paddy Power’s next hurdle.
Straddling the Irish Sea as they do, Paddy Power will be subject to the double whammy of the Irish Betting (Amendment) Bill this year AND the UK’s 15% imminent online point-of-consumption tax.
Had both of these laws passed into effect early on this year, Paddy Power state that they would have cost them tens of millions of euros more — even allowing for hyperbole, the situation would probably be looking even less healthy right now.
But we’re sure that Paddy Power can keep one step ahead of the legislators, and even their own customers, and will be a big part of the gaming scene for many years to come. To be sure, if you will.