GVC Holdings PLC (LON: GVC), owner of major UK bingo brands Foxy Bingo, Bwin, Ladbrokes and Coral, recently raised its annual profit forecast. This is the second time in the last three months that the company has raised the forecast. Its early entry to the US sports betting market and the booming market conditions on American soil is helping the firm achieve staggering growth.
Gambling companies in Britain are finding greener pastures in the US, where sports betting was legalized only recently. Back home in the UK, these firms are facing stricter gambling regulations. Authorities’ reduced the maximum stake on fixed-odds betting machines from £100 to just £2 which are eating away at their revenues. However, there are new opportunities waiting across the Atlantic.
Teh gambling giant quickly capitalized on the opportunity. The Isle of Man-based firm quickly entered a joint venture with MGM Resorts International, a US-based hotel and casino giant. Together, they launched the BetMGM mobile gambling app in September for residents of New Jersey and claimed that the response has been positive.
GVC expects around £670 million to £680 million in its core full-year earnings. Its revenue from online gambling is rising, and the firm suffered a smaller than expected impact of tighter regulations on betting shops in the UK. It shut down 41 shops in the last quarter to comply with new rules. In August, it suggested that the expected earnings for the full year would be around £650-670 million. Company shares rose by 4% after the news was announced.
More states in the US are now legalizing sports betting and online gambling because of which firms like GVC expect to turn a good profit in the years to come. With onshore activities drying up, online gambling contributing more to the revenues and the availability of the US market, GVC is expecting to reap more rewards in the future.