In the world of digital betting, the fiscal winds are ever-changing, and for the online gaming operator Bet-at-home, 2023 proved to be a year of tribulations and transformation. Revenue for the 2023 fiscal year saw a decline, with figures registering at €46.2m—a drop from the €53.5m recorded in the preceding year. This contraction in revenue has been identified as a consequence of various factors both from within the company’s ecosystem and the external marketplace.
A key issue contributing to the revenue slump is the introduction of monthly wagering limits across products and providers in Germany, a change that came into effect in the middle of 2022. Additionally, regulatory measures requiring reporting of increased deposit limits starting from the second quarter of 2023 further compounded the situation.
The shift in player base from Bet-at-home’s own .com and .de platforms to EveryMatrix’s system also played a significant role in the year’s outcome. Transitioning to EveryMatrix, an external provider, involved outsourcing the company’s German-licensed .de offering, with completion of this migration by October 2023.
The repercussions of the dip in group revenue cascaded to other financial metrics, resulting in a 14.1% reduction in net gaming revenue, which settled at €36.1m. Betting fees, gaming levies, and VAT all followed suit with dwindling figures compared to the previous year.
Although the decline in revenue was unanticipated, Bet-at-home anticipated the downturn due to the aforementioned developments. They had adjusted their revenue target accordingly in October—from the original projection of €50.0m down to a range of €44.0m to €48.0m. Landing at €46.2m, the company’s revenue bravely weathered the storm and met the mid-range of these revised expectations.
In a silver lining, the decrease in revenue came alongside a decrease in operational spending across multiple sectors. Notably, advertising expenses rose by 25.0% to €17.0m, yet personnel costs plummeted by 35.6%, and other operating expenses fell by 22.2%. This reduction in costs has been attributed in part to the strategic decision of outsourcing, which is in alignment with Bet-at-home’s vision to streamline the business and operate more efficiently.
Bet-at-home’s commentary on the situation points to the benefits of decreasing internal complexity and reliance on resources through increased outsourcing, resulting in savings on IT expenditures and an ostensibly improved financial performance. Looking forward, the company anticipates that these strategic actions will pave the way to maintaining a simplified and cost-effective organizational blueprint.
As for assets, depreciation and amortization saw a 27.3% decrease, standing at €1.6m. Finance costs witnessed only a minor rise to €595,000. These dynamics resulted in a pre-tax loss amounting to €1.4m, roughly doubling the loss of €690,000 encountered in 2022.
After accounting for taxes, Bet-at-home reported a net loss of €1.5m for the year from its continuing operations, contrasting with the €11.9m profit of the year prior. It is important to note that the profit from 2022 included €11.3m from discontinued operations, which if excluded, would present a significantly reduced profit figure of just €551,000.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) also suffered, plummeting 61.7% to €807,000 for the full year.
With eyes on the horizon, Bet-at-home optimistically prognosticates its strategic metamorphosis persisting into 2024. The group has professed its intent to continue investments in its internal data platforms and to redouble efforts on in-house development. Collaborations with EveryMatrix will concentrate on refining online casino and sports betting products.
Bet-at-home is resolute on capitalizing on the extensive brand recognition it has cultivated in core markets like Germany and Austria to enhance its industry stature. This strategy includes targeted marketing initiatives, with special focus earmarked for the upcoming UEFA Euro 2024 hosted in Germany.
The company is buoyant about its growth prospects for 2024, forecasting its gross revenue in the range of €45.0m to €53.0m, and anticipating its EBITDA to orbit between a €1.0m loss to a €2.5m gain. With the excitement of the Euro tournament potentially elevating consumer engagement, Bet-at-home stays cautiously optimistic in forecasting its financial rebound in the year ahead.
