Interactive

UK – World Cup drives record quarterly revenues for Betfair

By Phil - 4 September 2014

Revenue was up 30 per cent for Betfair during the three month period ended July 31, driven by a strong World Cup and continued momentum across all products.

Revenue was up 30 per cent to £117.3m driven by the World Cup, favourable sporting results, an improved Gaming performance and continued growth in Betfair US. Excluding the World Cup, revenue was up 12 per cent.

Revenue excluding the World Cup was up 12 per cent, including 17 per cent growth in sustainable markets
Mobile revenue was up 162 per cent with the channel contributing 70 per cent of Sportsbook revenues.
Customer acquisition was up 181 with the number of active customers up 48 per cent. The period also saw new products performing strongly: Almost 1m Sportsbook bets received a Price Rush, giving customers an average 24 per cent boost to odds on these bets.

Breon Corcoran, Betfair’s Chief Executive Officer, commented: “Betfair’s ongoing product innovation and marketing investment led to an excellent quarter against all key metrics, with continued momentum in sustainable revenues and customer numbers enhanced by a strong World Cup. World Cup revenue of £15.9m was approximately double that generated from the previous major international football tournament at Euro 2012 and contributed towards making this a record quarter for Betfair.

“The introduction of the Sportsbook means we can now offer superior value to customers who prefer promotion-led offers as well as those who simply want the best odds offered by the Exchange. At the
World Cup we led with a market leading promise to return losing stakes if England lost and if matches went to extra time,” he added. “The two England defeats followed by eight draws in the knock out stages meant we returned a seven figure sum to customers.”

Mr. Corcoran said the World Cup offered a unique opportunity to acquire new customers and increase engagement with existing customers.

“As a result, we saw record new customer activations and a 65 per cent increase in the number of active customers in sustainable markets,” he explained. “Throughout the quarter, we have continued to see the benefits of integrating our Exchange and Sportsbook platforms. One third of Sportsbook customers received a Price Rush and, on average, benefited from a 24 per cent increase in odds.
We are focused on a number of challenges, including our early stage investments in New Jersey online casino and Italy, and uncertainty remains in a number of unregulated markets. However, we are encouraged by the performance in the first quarter and the momentum of the business, and accordingly remain confident that we can deliver our expectations for the full year.”

During the World Cup Betfair’s customers placed over 22m bets, up from 18m from the 2010 World Cup. On some markets over 70 per cent of Sportsbook bets were Price Rushed and therefore matched on the Exchange. Sports results were very favourable for bookmakers in the period, including during the World Cup, and the higher than expected gross win margin resulted in approximately £7m of additional revenue, although some of this was returned to customers through free bets.

Gaming revenues benefited from the higher number of sports customers active during the World Cup, more effective cross selling and increased mobile usage. The 45 per cent year on year growth rate was also helped by the non-recurrence of weak casino margins in the comparative period.

Betfair US revenue was up 26 per cent, driven by an 18 per cent increase in TVG handle and the contribution from the New Jersey online casino, which launched in the third quarter. Wagering volume growth in TVG included a strong mobile performance following the introduction of its iOS app, which remains the only one in the market.