Stars Group acquisitions drive serious revenue spike
The Stars Group, a mega-gaming operator based out of Toronto, is enjoying a pretty sweet revenue spike thanks to some recent acquisitions. Earlier this week, the company wowed industry analysts with the news that revenue for the three months ending September 30 was up a whopping 73.6 percent over the previous year. This was due, mostly, to cash that’s been flowing in from the purchase of several Aussie gaming outfits and the UK-based Sky Betting & Gaming (SBG).
That 73.6 percent boost came out to be right around $572 million (USD), with roughly $220 million of that number coming directly from the new acquisitions. That boosted the company’s adjusted earnings to $175 million for the period, which represents a 12 percent increase over the previous year.
While there was plenty of good news from the Stars Group that emanated from new sources, one of the company’s core products failed to deliver the same level of productivity. On that same earnings call, company officials reported that poker, the very heart and soul of the operation, wasn’t producing at the oil gushing levels of other parts of the company.
Reported revenue for poker products clocked in at $212.8 million, which is down 3.9 percent from the previous year. This dip, however, wasn’t necessarily the result of less interest in poker. Company analysts pinned the dip on fluctuating currency prices.
Like most global gaming operators, the Stars Group is expecting to see some sort of revenue dip in the year ahead thanks to tax increases in places like the UK. They’re also expecting to spend a lot more compliance as regulators worldwide are clamping down on everything from ad regulations to efforts to fight problem gambling.
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