bet at home com AG (DE:ARTG) is a long-established sports betting brand, successfully cross-selling into gaming. As expected, Q118 revenues declined by 10.8% to €33.2m, mainly due to IP blocking in Poland. The company has reiterated FY18 guidance of €150m revenues and €36–40m EBITDA. Risks to future forecasts include uncertainty regarding e-gaming regulation in core markets. The company now has c 4.9 million customers and is well positioned to benefit from the 2018 FIFA World Cup. Largely due to regulatory concerns, the stock is down 22% ytd, trading at 13.3x 2018e EV/EBITDA. This is still a premium to peers, but the company’s high cash flow and ability to pay special dividends is very attractive.
Regulation uncertainty in key markets
bet-at-home’s main markets are Germany (35% of gross win), Austria (24%) and Eastern Europe (23%). In FY17, the mix of gross gaming revenue (GGR) between sports and e-gaming (casino, poker) was 44%/56%, 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 Regulatory risks are high, as evidenced by last year’s IP blocking in Poland, with similar proposals (subsequently withdrawn) in Austria. In Germany, the regulatory environment remains unclear, particularly for online casino, and the company has ceased casino offerings in the state of Schleswig-Holstein.
To read the entire report Please click on the pdf File Below: