Betfair breaks even in New Jersey
News on 11 Mar 2017
News on 11 Mar 2017
The post-results press conference following the release of Paddy Power-Betfair’s FY-2016 report recently (see previous report) revealed the interesting news that Betfair’s US operations are doing well, and that its online casino partnership with Golden Nugget in New Jersey has reached EBITDA break-even following a 39 percent rise in revenue, and will soon be profitable.
Betfair’s US interests include the New Jersey online casino operation and the California-based TVG online horse racing business.
Discussing the company’s US assets, Paddy Power Betfair chief executive Breon Corcoran said:
“US division revenue in local currency increased by 13 percent and operating profit increased by 9 percent. These results include TVG, where revenue increased by 9 percent on handle or stake growth of 4 percent.
“Betfair Casino New Jersey revenue increased by 39 percent, and the casino is now operating at the breakeven EBITDA after a couple of years of start-up losses.”
The British pound sterling has devalued considerably since the spectre of Brexit arose last year, and in sterling terms Betfair Casino’s growth is around 56 percent y-o-y – up from GBP 7 million to GBP 12 million, with Corcoran claiming that the company and its partner now enjoy a “low double-digit” share of the New Jersey online market.
FY-2016 figures published by the New Jersey regulator, the Division of Gaming Enforcement record revenues for the partnership of $42.25 million last year, and in the past six months the partnership has been steadily ramping up monthly revenue and becoming increasingly noticeable in the market.
Industry observers point out that making headway in a competitive market is not the only challenge facing New Jersey online operators.
They also face a total state tax bill on GGR of 17.5 percent and have the additional costs of specialised but mandatory technology services such as geo-location to shoulder in order to ensure that punters are within state boundaries. State law also requires that company servers are maintained within New Jersey.
