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Online Pokies Will Hit Big Revenues In Future | Aristocrat, Playtech, NetEnt




The closure of land-based casinos worldwide following the crisis that happened in the first quarter of 2020 had consequences. Like with other sectors, the gambling sector witnessed a drop in revenue from brick-and-mortar casinos.

The entire industry witnessed a total decline in 78.8% revenue to make a total of 2.3billion dollars. Contributing massively to the drop includes 81.9% drop in land slots, 86% drop in table games revenue, and 46.3% drop in revenue for sports betting. However, the online casino sector of the economy seemed to gain a boost during the period. Internationally, the niche did collect a gross gaming revenue of 402.7 million dollars at the end of the second quarter of 2020—a record that has never been in history.

Comparing the year 2020 with the preceding year, numbers show almost three times the performance recorded in 2019. Year on year, the second quarter of 2020, compared with that of 2019, shows a growth rate of 253.8%.

In the first half of 2020, online casinos gathered a revenue amounting to 634.9 million dollars. Comparing that with 2019, the industry grew at a rate of 189.7%.

In Australia, things are not so different from what they are at the international level. As a whole, the gambling industry has lost 27.4% of its market size in 2020, making it worth 4.5 billion dollars. As we counted every passing day during the lockdown, land-based casinos in Australia lost roughly 14.6million altogether daily. Despite the general downturn, the online gambling sector seems to be flourishing.

A report from the government shows a sharp increase in online slots' revenue since the pandemic started in 2020. The report claims that people now put in about twice the amount they used to every month since the crisis began. About 33% of the gamblers in Australia now gamble four times a week and more.

Moving forward, the industry expects to make a big come back and close the 27.4% decline gap. By 2025, the sector's growth should rise by 19.9%, resulting in -7.5% of its size in 2019. With the industry's online pokies aspect rising at such fast rates, we expect that the sector will drive this growth. The following information about some of the big players in online gaming will explain how online pokies will transform the entire industry.

 

Aristocrat Expands the Scope of Activities

Aristocrats Leisure Limited, also known as Aristocrats, is one of the world's largest manufacturers of slot machines. The company ranks as the second in the world after the International Gaming Technology of USA. Aristocrats operates from Sydney in Australia, where it has rolled out some of the finest titles in the world of slots. Attesting to its immense reputation, the company has a license in over 200 jurisdictions globally, including Australia, the USA, Russia, and many other parts of the world.

In the first quarter of 2020, Aristocrats faced the harsh realities that came with the COVID-19 crisis. Even though the company recorded increased revenue, profit went down by 7% as of March 2020.

Comparing the first half of 2019 with 2020, its revenue grew by 7% from 2.11billion as of June 2019 to 2.25 billion in 2020. The digital segment of the company gave it a significant boost during the pandemic. Alone, the part grew by 19% in the first quarter of 2020, accounting for 46.4% of the total company's sales. The increase in the digital segment comes from increased activity in online slots.

Aussies, for example, engaged in playing Aristocrat pokies online in Australia for real money during the spring as a method of recreation. Using their iPhones or Android, players enjoyed new releases like Where's the Gold slot, with no downloads. The online platforms also had some of their best titles like Indian Dreaming, Lightning Link, and many more online. While some played with money, others played free spins on free pokies online.

Revenues from gaming operations witnessed a slight decrease of 0.72%, contributing a total of 27.3% to the company's overall revenue. Unfortunately, revenue from Class III outright sales and others also dropped by 21.5%. As of 2020, the segment accounted for 26.3% of sales. This sharp drop in company sales is mostly due to the closedown of casinos worldwide.

As a means of adaptation and survival, the company changed its business, including laying off 1000 of their staff. Their response to the pandemic centered around four key points and they are:

  • Protecting the wellbeing of all persons related to the business. This would include their 6,200 employees, suppliers, and numerous customers during and after the crisis.

  • Making fair use of competitive edge.

  • Plan ahead of the pandemic to return land-based business in full force when demand returns.

  • Optimise liquidity up to 1.8 billion dollars.

Looking forward, the company expects to boost revenue and save about a 100million at the end of this year. The company aims to achieve this by diversifying their streams of income. Also, the company plans on adding more value to their outstanding products.

 

Playtech Conquering Europe

When it comes to slots, only a few do it better than Playtech. They have a collection of some of the best slot games in the world. Over the years, they have successfully created a name for themselves as one of the largest software providers for online gaming. Also, the company is publicly traded, offering value-added solutions to leading operators in the gambling industry. They provide most of the games in many online game lobbies today. Their rich collection spans from movies, comics, athletics, and sports.

Even with their operation's depth, the company was not left out in the crisis that rocked in 2020. As part of plans to stay ahead in their game, the company swiftly responded with the following actions:

  • Limiting the effects of the pandemic on their personnel, partners, and businesses took the highest priority.

  • A business continuity plan was developed and used in the early stages of the pandemic.

  • Response from their teams and local communities

  • Transition into remote work with the same level of productivity and punctuality maintained.

  • Tools for safer gambling were made available for free during the crisis.

At the beginning of the first quarter of the year 2020, the company was off to a great start. This was mainly driven by TradeTech, Snaitech, and good sporting results. However, the pandemic forced the company to suffer a 23% decline in revenue from 727.8 million euros in 2019 to only 530million euros in June 2020.

Even with the pandemic, the group still managed to make an earnings of 160 million euros. That was after they adjusted the EBITDA for the first half of 2020. With that, their adjusted earnings in the first half of 2020 only suffered a 16% decline. This was all thanks to the number of online casino games that they had before the crisis started. That is live games, Poker, Bingo, and most importantly, the excellent performance of TradeTech. However, all that was not enough as they suffered a 44% loss in profit in the first half of 2020.

Looking into the future, the CEO is hopeful for better days. Their plan includes increasing their work with already existing tier one licensees, thereby adding at least 50 new brands to their SaaS model. They also plan to continue their strategic expansion into new markets. Their focus includes the US and some parts of Latin America as we speak.

In showing commitment to these goals, the company recently signed a partnership deal with Novibet in Greece. Also, they launched their live casinos in Italy. In New Jersey, the company is launching its collaboration with bet365.

 

NetEnt Overtaking land-based & online casinos

NetEnt ranks amongst the oldest and largest companies in the gambling industry. The company was formerly known as Net Entertainment. But at some point, the name changed since most players in the industry preferred calling them NetEnt.

As of today, they are active in Europe, North America, and the US. In addition to that, they own an online casino, NetEnt runs only their games. Their success so far in the industry points to the hard work and dedication of their 600 employees. Their high-quality games are played in the biggest and most successful gaming casinos today.

With their robust statue, NetEnt did not suffer any significant losses to the ongoing pandemic in 2020. This was due to swift action and an extensive collection of online games before the crisis. Even at that, the company has responded well to the situation in the following ways:

  • The company gave priority to the health and safety of its hard working staff.

  • Continued digitalization of significant products for increased growth.

  • Integration of Red Timer gaming, which boosted their collection and helped them expand into more markets.

  • Product improvement of actual products, especially in the area of live games.

Financial indicators from the first quarter of 2020 show a 23 percent growth worth 518 million SEK than 418 million from the previous year. That quarter's earnings also increased to 229 million SEK compared with 196 million SEK during the last year. Even though marginal profit dropped by 5%, after adjusting costs, the EBITDA stood at 254 million SEK with a 49.1% margin compared with 196million SEK (47%) in 2019.

At the end of the second quarter, the earnings after tax dropped by 32%. This was due to the financial costs and liability that came with acquiring Red Tiger.

Moving forward, the company plans to improve its profit by expanding its reach in the US. More games would be launched in Michigan and West Virginia before the year 2020 runs out. There are plans to have more live casinos. The company's leadership plans to move its online enterprise to less gambling markets in Europe and Asia.

Besides, there would be a massive improvement in already developed products. All hands would be on deck in shaping the IP of the company. Integration and cost control would also be a focus from 2020 forward.

Just as promised, the company has concluded its full integration with Red Tiger. The integration has begun to bear fruits. One of those fruits includes the new tables in Malta studio. Also, the company has released 12 original games; six from NetEnt and six from Red Tiger. They have improved the quality of the mobile interface as well.