Betfair boosted by Euro soccer and mobile apps
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Betfair faces competition from traditional bookmakers who are seeking to develop rival online and mobile operations while maintaining their shops on British high streets.
The online bet-matching company, set up 12 years ago, reported a 15 percent rise in underlying profits (EBITDA) from its core businesses to us$ 142.66 million in the year to April 30. Betfair shares rose 2.8 %.
A large increase in mobile betting during the Euro 2012 soccer tournament this month was credited with a portion of the growth in the online gaming company's underlying profits. "There is a substantial uplift per customer because they bet more with their mobile products than they do online," said Chief Technology Officer Tony McAlister, who developed Betfair's Euro 2012 mobile app. The company said it could produce the product again for such tournaments in the future. "Sitting in front of one of these Euro 2012 matches with your iPad on your lap really increases the betting that customers are doing."
Interim chief executive Stephen Morana said that this month's Euro 2012 championships had been "the world's biggest ever sports betting event", noting that the company had taken more bets on the tournament than it did on the 2010 World Cup. Betfair said that revenue from core operations was up 18 percent over the past eight weeks. Morana said that Euro 2012 was responsible for about a third of the increase.
Betfair acts as an intermediary between gamblers wanting to place a bet or offer odds to others, taking a commission on their wins and generally offering better odds than traditional bookmakers, which take bets directly from customers. The company floated in October, doubling the current level. Betfair faces competition from traditional bookmakers who are seeking to develop rival online and mobile operations while maintaining their shops on British high streets.
The complexity of that juggling act was underlined on Thursday, when shares in Ladbrokes fell 12 percent after Britain's second-biggest bookmaker said that profits from its digital division would fall more than expected.Morana, the company's finance director, is holding the CEO role on a temporary basis until the arrival of Breon Corcoran, who will join the company from Irish bookmaker Paddy Power in August.
The transition will come during the Olympic Games in London, which begin on July 27. Morana joked that he was "counting down the days" until he handed over the pressures of the top job. Bookmakers have been cautious about the Olympics and Morana repeated the mantra that it was "not a huge betting event".
"With the Olympics, we're all venturing into the unknown. It will be fantastic in bringing in new customers, but there will be some cannibalisation," he said, referring to how the Games would draw attention from sports such as horse racing.