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Gambling Group Reports Significant Loss

Many online casino companies are struggling – some because of setbacks after the U.S. Unlawful Internet Gambling Act, others because of trouble maintaining market share, and still others are simply negatively affected by the risky nature of gambling. Leisure and Gaming plc (L&G) falls into the third category. The company reported significant losses for the first half of 2007; for the most part the report was due to losses reported in the company’s subsidiary, Betshop group. The online casino and betting industries are expected, unfortunately though, L&G was not fiscally prepared to handle the recent downswing.

L&G operates primarily in the Italian market, with franchised betting shops located all over Italy. And because Italy has only recently released new policies and regulations concerning online casinos and betting in the country, the market is slowly beginning to expand and new competition is entering the market place.

But beyond the new competition, the main reasons that the six-month report was negative is not because of the online casino industry but rather the results of sports games in May and June. Henry Birch, the CEO at L&G, commented: “Last season was not great for the Italian industry as a whole and on top of Milan winning the Champions League, there were a number of weekends where many of the favourites won in the league. When you take combination bets, the margins are usually very good but a bad run of results will hit hard.”

The report though was not entirely negative, some positive report results include growth in turnover, top-line growth from the same period in 2006, and growth in net wins. Losses though outweighed the good news for most online casino industry analysts, between gross profit losses and very high EBIT loss in Betshop, the company is certainly not in the healthiest place it has ever been.