• Home
  • News
  • Results
  • Tipsters forecast disappointing Q4 for UK operators amid poor World Cup results
igamingnext photo
The Q4 financial performance of UK operators is likely to be disappointing, at least according to tipster service City Bet Club (CBC). 

In a new analysis, CBC cited a “triple punch” of factors expected to have a significant impact on both turnover and earnings.

Those factors included a steep decline in World Cup turnover compared to Russia 2018, an overhaul of the sporting calendar to accommodate the 2022 winter tournament, and the introduction of increased affordability checks for UK punters.

CBC offers trading and betting insights and was established as a subscription service in 2022.

Co-founder David Brown said Q4 2022 brought with it the most pessimistic outlook for the UK betting sector he has seen in some 47 years in the industry.

Disappointing World Cup

According to CBC, the World Cup should have led to strong margin wins for operators due to unexpected results, making it one of the most beneficial tournaments for bookmakers in history.

However, the tipster service found that early losses for punters in the group stage, which continued throughout the tournament, greatly impacted overall turnover.

This was reflected in the January trading updates issued so far by major UK operators, CBC said.

CBC highlighted bet365’s 88% decrease in operating profit for the financial year as a strong indication that the UK is far from a growth market, although that reporting period was pre-World Cup and pre-Q4.

The unstable environment was supported by Kindred Group’s low sports margin in Q4 despite the “bookie-friendly” World Cup results a development described as unexpected.

Kindred issued a profit warning amid weaker-than-anticipated Q4 performance and announced cost-saving measures to enhance profitability.

Another major indicator that World Cup turnover fell short of expectations came in the form of 888/William Hill’s trading update; particularly in terms of like-for-like gross win performance compared to Russia 2018.

888 chose to highlight the metric of ‘Player User Days’, by comparing customer engagement performance of the delayed Euro 2020 with Qatar 2022, and CBC concluded the data does not bode well.

The operator reported that online player days at William Hill during the World Cup were up 22% when compared to Euro 2020.

However, the World Cup had 25% more matches and did not face competition from a heavy summer sporting schedule.

Therefore, the “like-for-like comparison” of only a 22% increase was deemed disappointing by CBC.

Reduced betting activity

Compounding the overall issue for UK-facing bookmakers further are enhanced affordability checks,  which are a major factor to consider in reduced betting activity for UK operators, according to CBC.

Brown commented: “While the World Cup may have seen record margins, word on the street is that turnover is significantly down compared to Russia 2018.”

“Traditionally a major football tournament and robust Christmas period, with a full programme of racing, would normally put the big brands in very positive territory.

“Currently – the silence says it all, and we’re yet to see comparisons of like-for-like turnover to the 2018 World Cup, which may infer all is not well,” he added.

Finally, Brown pointed to the uncertainty surrounding the UK government’s upcoming White Paper on gambling legislation, which is still to be published.

“This has the potential to add even more challenges to the operation of the UK betting market. It will no doubt be a key decider on how the industry proceeds from here,” he added.

It appears the UK government’s long-awaited review of the 2005 Gambling Act will not be released until February 2023 at the earliest.

Similar posts