bet365 Records Increased Revenue for 2022
Sports betting giant bet365 has reported a slight increase in revenue for 2021-2022. According to its latest fiscal report for the year up to 27/03/2022, bet365’s revenue from sports betting and iGaming came to £2.85bn, which is a 2.9% increase from the previous year.
According to the numbers, the growth was mainly due to the betting provider’s revenue from iGaming products which balanced the books against the slight decline in sports betting revenue for the year. According to the bet365 report, revenue from sports betting was 2% lower than the previous year, however iGaming revenue was up by 25%. In real terms, this amounts to a revenue of about £2.30bn in sports betting, and iGaming revenue of £546mn.
Analysing the apparent decline in sports betting revenue, bet365 explained that this was margin-based, and that total amount of sports bets and wagers actually increased year-on-year. Furthermore, bet365 pointed out that sports betting customer numbers were up by 48%.
According to industry experts and business analysts, the bookmaker’s sports betting performance actually improved by 15-20% in real terms. According to one analysis by strategic advisors Regulus Partners, bet365’s margins for the fiscal year 2021-2022 were normalised following very high levels in 2020-2021. Regulus Partners pointed out:
“To a large extent, Bet365’s underlying performance is far stronger than 2% revenue growth suggests, especially as evidenced by a nearly 50% increase in global active users.”
It appears that the numbers in bet365’s report are correlated to “unusually high sports betting margins”. These were in turn affected by factors such as lockdown, the response to CoVID-19, and other major disruptions and unforeseen events. The combination of such factors resulted in about 15% drop of revenue, and this was complemented negatively by certain sports betting results combined with a number of bonus and promotional offers during the second half of FY22.
According to Regulus Partners, when the above calculations are taken into consideration, it is clear that about 20% of the difference is to do with margins and bonuses. When that is discounted, what is left is a “healthy underlying sports betting growth rate of 15-20% across the business.”
Despite the slight drop in sports betting revenue, the company has continued with its great introductory offers, and continues to feature at No. 1 on our list of best betting sites. Its current introductory offer is an unbeatable “bet £10 get £50” for UK customers.
Some of the decrease could also be due to a number of new safer gambling measures supported and implemented by bet365. Such measures, combined with growth in emerging markets, appears to have resulted in about 10% less revenue per user on average. One of the new features introduced by bet365 is ERDS – the Early Risk Detection System, which allows the bookmaker to identify and support any customers who might be at risk or experiencing harm. Discussing about safer gambling, a bet365 report stated:
“The group is committed to delivering a safe environment for its customers and we continued to invest significantly in this area. Evaluation of ERDS continues to demonstrate a highly positive impact on player behaviour and an increased use of gambling management tools”
In terms of profit for the same period, bet365 has recorded an almost 90% drop due to the investments made in customer acquisition in non-core markets. In real terms, bet365’s real profit is recorded at £49.8m, compared to £469m in the previous year. A large part of this difference is due to £320m in administration costs, including advertisement, new technology, and IT infrastructure to serve new launches in jurisdictions such as Buenos Aires, Argentina, Netherlands, Ontario, and Colorado.
Staffing costs for the company were also up, with bet365 creating over 700 new jobs. Staff numbers for the period rose from 5,400 to 6,100. Some of these new positions were financed by lowering the pay of the company’s directors, including that of Chief Executive Denise Coates who took a 16.5% pay cut.
bet365 also pointed out its significant investment in new products and technology. As part of this, the sports betting provider’s website saw a number of improvements and enhancements. Also, bet365 introduced several new products such as a new Golf betting option, updated visuals in the virtual sports sections, and the “Bet Builder” which introduced the Rugby League, Australian Rules, and American Football. bet365 also introduced an extension of Match Live which now includes two new eSports games.
Not afraid to invest in new markets and technologies, bet365 has boldly chosen to take a big decrease in profit, but this is very likely part of their long-term strategy to become the leading sports betting provider in the new jurisdictions they serve. It will be interesting to see the returns on these investments in the next few fiscal years and we will follow with interest what bet365 has planned for 2023.