Allwyn posts GGR up 23% in Q2; sees "limited" impact from inflation as it prepares for UK Lottery takeover

Allwyn, the company set to become the UK National Lottery’s new operator, said the cost-of-living crisis has had a “limited” impact on the demand for its games. The gambling giant –which runs lotteries in Austria, Italy and Greece– posted €902 million ($902 million) in Gross Gaming Revenue for the second quarter of the year, up 23% from the same period in 2021.

The positive results reflect continued organic growth and a more normalized operational environment after the full reopening of its retail business, the company said. But the business also saw continued strong growth in online sales, with this vertical contributing 44% of GGR in the Czech Republic, for instance, which was up from 38% in Q2 2021.

The operator says it is also continuing to deliver inorganic growth strategies through acquisitions and participation in tenders, including preparations to take over the UK National Lottery once the Gambling Commission confirms the award. The company is expected to become the next operator from 2024, and while Allwyn admitted recent economic events could continue to have “some impact” on business, it remains optimistic going forward. 

“Current inflation and rising energy prices have a limited impact on our costs, with our largest cost categories directly linked to revenue (e.g. gaming taxes, agents’ commissions) and energy accounting for a small proportion of our costs,” the business said. Additionally, all of the company’s businesses are currently operating without material impact from COVID-19 related restrictions “for the first time since the beginning of the pandemic.”

As for the war in Ukraine, Allwyn said it has not been materially impacted by it, and that its suppliers have not experienced any material disruptions. “The above-mentioned macroeconomic and political developments continue to have some impact on consumer sentiment in general in the countries where we operate,” the business conceded. “However, the impact on demand for our products has been limited.”

“I am pleased to report that in the second quarter of 2022, Allwyn delivered yet another set of strong financial results and continued to make good progress on key strategic initiatives as part of our organic and inorganic growth strategies,” commented CEO Robert Chvatal. In addition to developments in the UK, the company reached an agreement with Greek lottery operator OPAP to acquire its 36.75% interest in online sports betting and iGaming brand Kaizen.

As for confirmation of the award of the UK Lottery’s fourth license, Allwyn is looking forward to a Court of Appeal hearing in September, which follows an appeal from current operator Camelot of the High Court’s decision to allow the license to proceed. 

Allwyn was first chosen by the UK Gambling Commission as the next licensee in March. However, Camelot launched a challenge against the UKGC soon after in April, accusing the regulator on the grounds of breaking the law when it allegedly discarded its score in the system that measures the bids. 

“Once again, we have continued to see the value of our geographical, channel and product diversification, with strong performance compared to our expectations at the start of the year in some markets compensating for somewhat weaker performance in others,” Chvatal further said about Q2’s performance.

See Allwyn's full Q2 report here.