bet at home (DE:ARTG) is a long-established sports betting brand, successfully cross-selling into gaming. As a result of last year’s IP blocking in Poland, Q218 gross gaming revenues (GGR) declined 15.6% to €33.4m. EBITDA was additionally affected by FIFA World Cup marketing spend but management has reiterated FY18 guidance of €150m revenues and €36–40m EBITDA. Risks to forecasts include uncertainty regarding e-gaming regulation in core markets. Largely due to regulatory concerns, the stock is down 40% year to date, trading at 9.7x EV/EBITDA and 12.7x P/E for 2018e. This is in line with peers, but the company’s strong cash position and ability to pay special dividends is very attractive.
Regulatory burdens in Poland and Switzerland
At H118, bet-at-home’s main markets were Germany (36% of gross win), Austria (31%) and Eastern Europe (18%). The mix of GGR between sports and e-gaming (casino, poker) was 43/57%, demonstrating successful cross-selling into gaming. Some of its markets are fully regulated (eg UK), but formal licensing has not yet been introduced in many of its main markets, where it pays taxes and VAT as applicable and operates under its EU licence. Regulatory risks are high, as shown by last year’s IP blocking in Poland, with similar proposals (subsequently withdrawn) in Austria. In addition, Switzerland recently voted against foreign providers of online casinos (c 3% revenues).
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