Stars Group Moving Away From iPoker Good for U.S. Gambling Industry
The Stars Group, the parent company to PokerStars, began as exclusively an online poker company and for years had a stranglehold on online poker around the globe. In recent years, the company has expanded into other ventures, including sports betting. As a result, their reliance on online poker as a primary revenue stream has decreased.
According to a recent Q2 financial for the company, The Stars Group is further moving away from online poker as it represents just 30 percent of the company’s revenue.
Online Poker Share Drops By 23% in One Year
The Stars Group recently released their Q2 earnings report for 2019 and revealed that online poker now accounts for just 30 percent of their total revenue. This is a drop by 23 percent year-over-year. In Q2 of 2018, online poker contributed 53 percent to overall revenue.
Going back to their Q1 report from 2018, online poker contributed 62.6 percent to total revenue. This is a stark drop of 32.6 percent in over a roughly one and a half year period. The Q2 2019 report revealed that The Stars Group suffered a 20 percent drop per share. This would seem like bad news for the company, but that’s far from the case.
According to the report, the company’s revenue increased by 51% year-over-year. There are a couple of key reasons for this. The first is that the company acquired Sky Betting & Gaming in 2018. This was a significant contributor to the revenue increase. The other hinges on the changing face of online gambling for both the company and the industry.
Sports Betting See Huge Gains for Stars Group
Not surprisingly, The Stars Group has continued to shift more of their focus towards sports betting. They have been in the news a lot this year with partnerships with both the NBA and Fox Sports. Last year, sports betting represented just 20 percent of overall business. This year, the company reported that 36 percent of total revenue comes from sports betting.
Some of this can be attributed to the expansion of online sports betting in the United States. Multiple states have legalized sports betting with other states such as Iowa getting ready to go live shortly. The continued expansion will put The Stars Group in a prime position to be a leader in online sports betting.
CEO Rafi Ashkenazi spoke on their expansion, stating: “2019 has been and remains a year of integration, execution and debt reduction. We are committed to those key strategic priorities for the rest of the year while we also build our foundation and momentum to become a market leader in the U.S.”
Stars Group Expansion is Positive Sign for US Online Gambling
While a Q2 report is largely used as a way to evaluate a company’s financial standing, it should be also viewed favorably by those that are paying attention to online casino gambling expansion in the United States.
The Stars Group is experiencing significant growth in the sports betting market and this is a good thing for those hoping to see continued online gambling expansion in the United States. Sports betting is the hot trend currently for online gambling but can also act as a gateway for other activities.
For example, West Virginia was able to legalize both online casino gambling and online poker while legalizing sports betting. The same was true for Pennsylvania. In fact, Pennsylvania has already launched online casino gambling and online sports betting with online poker being delayed until at least late 2019.
While online poker fans will not necessarily view The Stars Group reliance on sports betting as a good thing, online gamblers in general should celebrate this news as it likely means broader horizons ahead for legalized gambling in the United States.