The Stars Group has reported a nine per cent increase in revenue to US$622.5m for the third quarter of 2019 increased primarily as a result of revenue growth within the United Kingdom and Australia segments.
During the quarter, online sports betting was The Stars Group’s largest product vertical, 35 per cent versus 27.7 per cent in 2018, followed by online casino, 31.3 per cent versus 31.6 per cent in 2018 and online poker, 30.9 per cent versus 37.7 per cent in 2018, while 77 per cent of consolidated revenues were derived from locally regulated or taxed markets, 72 per cent in 2018.
“Our third quarter results were robust and in-line with our expectations, supported by strong revenue growth in our United Kingdom and Australia segments, which helped offset both the ongoing disruption in certain of our lower-priority international markets and continued foreign exchange headwinds across the business,” said Rafi Ashkenazi, The Stars Group’s Chief Executive Officer. “We have also made rapid progress in the US following our landmark FOX Sports deal in May, with the launch of our FOX Bet products at the start of the professional football season in New Jersey and Pennsylvania, and some very encouraging early signs from our FOX Sports Super 6 nationwide free-to-play games.”
“Our highly cash generative business model also enabled us to reduce our net debt by over $100m in the quarter and prepay yet another $100m in October, bringing our total prepayments since the beginning of the year to over $450m and around $600m since July 2018,” added Mr. Ashkenazi.
“Shortly after quarter end we also announced an agreement to combine with Flutter to create a global leader in online betting and gaming, and we are working diligently to bring the proposed combination to closing,” continued Mr. Ashkenazi. “We remain excited about the opportunities in front of us as the combination will enhance and accelerate each company’s growth strategy by providing a diverse portfolio of leading brands and complementary best-in-class products with a broad geographic reach.”
“Ahead of closing, we remain highly focused on our key strategic priorities of integration, execution and debt reduction. Not only have we largely completed the integration of Sky Betting & Gaming, but we currently expect to exit 2019 with a run-rate of the full $100 million of expected cost synergies and are beginning to execute on our plans for revenue upside through Sky Bet in Italy and Germany and our developing U.K. ecosystem,” concluded Mr. Ashkenazi.
In the eight weeks since launch, the FOX Sports Super 6 app had been downloaded more than 820,000 times, had more than 7.5m total contest entries and has been ranked in the top 20 in the games tab and in the top 10 in the sports section in the Apple App Store. The Stars Group also launched the real-money wagering FOX Bet products in New Jersey and Pennsylvania ahead of the start of the professional football season, both on-time and on-budget, and has seen encouraging week-to-week customer activity levels with the overall performance of the products in-line with its expectations, and is on track to reach its previously disclosed expected loss of approximately $40m in 2019. Following the end of the quarter, The Stars Group successfully launched PokerStars in Pennsylvania, the first poker product to launch in the state, and FOX Bet announced a multi-year agreement with the MLB to become an authorized gaming operator.