Gambling group GVC Holdings is set to expand into a new regulated market as increased online betting activity during the pandemic has seen the company upgrade its earnings forecast for the second time this year.
GVC said Thursday in its Q3 trading update that it will expand into the regulated Portuguese online sports betting and gaming market through the purchase of Bet.pt. The financial details of the deal were not disclosed.
After its reorganization in 2016, the Portuguese online gambling market quickly became one of Europe’s fastest growing. GVC said in its trading update that it expects the market to more than double to about €450 million by 2023.
Bet.pt was one of the first operators to obtain licenses from the Portuguese gambling regulator, SRIJ, following the reorganization of the local iGaming and sports betting space. The operator was granted a sports betting license in 2016 and a casino license in 2017. It has cemented itself as one of Portugal’s leading digital gambling operations, primarily in the sports betting space.
GVC said that by leveraging its technology, extensive portfolio of online gaming content, marketing and CRM capabilities, they see plenty of opportunities to grow Bet.pt and the entire group’s profitability and market position in Portugal.
The acquisition of the Portugal-facing brand is consistent with GVC’s strategy to expand its footprint into attractive regulated markets and ones on the verge of regulation.
Upgraded Earnings Forecast
In its trading update for the third quarter of the year, GVC upgraded its earnings forecast, saying that sports wagers were well ahead of 2019 due to a packed schedule of different sporting events after global sports were allowed to resume.
Group net gaming revenue was up 12%, while online net gaming revenue posted a 26% growth. Online gaming volumes remain ahead of their pre-Covid-19 levels, GVC said. The company also hailed continued strong performance of its Australian operations with a 64% growth of net gaming revenue.
GVC noted that it expects full-year EBITDA to be between £770 million and £790 million, ahead of the £720 million to £740 million range that the company had previously projected. This has been the second earnings upgrade posted by the multi-brand gambling group this year.
The company said that all of its UK and European stores opened as soon as they were given permission to and retail betting volumes are now within 10% of the levels seen prior lockdown. However, with Covid-19 cases on the rise, fears of a new wave of closures are growing and GVC said that they remain cautious on the outlook given the ongoing uncertainty.
In the US, GVC’s joint venture with MGM Resorts International, BetMGM, “continues to make great progress” and is “firmly on track to be the leading operator” in the US digital sports betting and gaming markets, the company said. BetMGM is now live in eight states and is poised to enter three more by the end of the year.
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