Intralot Hit Hard By COVID-19 & Discontinued Operations In Turkey & Bulgaria In 1H20

Article by : Helen Sep 23, 2020

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At the beginning of September, Intralot published its financial results report for the first half of 2020, and things do not look good for the company’s bottom line. First and foremost, the company’s revenue plummeted 55.5% to €159.1 million compared to the same period in 2019. There are three key reasons for it: COVID-19 that forced casinos worldwide to shut down for months, Inteltek’s contract discontinuation in Turkey in August 2019, and Eurobet’s discontinued contracts in Bulgaria from mid-February 2020.

Despite the depressing figures, Intralot showed a 1.7% year-on-year increase in the number of wagers handled, with Eastern Europe’s wagers being the fastest-growing ones and skyrocketing by 61.6% and North America providing an 18.9% increase in wagers as well. At the same time, wagers decreased in Africa, South America, and Western Europe. Lottery games turned out to be the biggest contributor to the company’s revenues, comprising 65.3% of it.

Intralot’s revenues break down into two categories: B2C and B2B/B2G operations. The largest losses on the B2C front were in Bulgaria, Malta, Argentina, and Brazil, with a total of €-171.9 million (-74.9% in a year-on-year comparison). Revenues from Bulgarian operations dropped by €140.3m due to Eurofootball and Eurobet’s changes in the consolidation method and the discontinued contract we’ve mentioned above. The other countries’ operations suffered losses mainly due to the COVID-19 pandemic.

As for the B2B front, the losses there amounted to €-32.2 million (-73.2% in a year-on-year comparison) for management services and €-5.8 million (-5.5%) for technology and support services. The biggest drivers behind these losses were several disturbances in the Turkish operations: contract discontinuation we mentioned before, a decline in Bilyoner’s performance, and the COVID-19 pandemic impact.

Things look dire for the whole global gaming industry due to COVID-19. The report mentions the current predictions that place the expected gross gaming revenue at the level of 2010-2011 ($353 billion). This is 26% lower than what was originally expected to be in store for the industry before COVID-19 stirred the pot. One of the key disruptions COVID-19 brought with itself is major sports events being canceled or postponed, often indefinitely.

On the other hand, some countries lifted their strict measures like lockdowns and stay-at-home orders earlier than was expected. Some of the examples include Malta and the U.S. Other countries like Australia and Morocco, however, confirm the company’s suspicions. Overall, the situation remains volatile, especially for a global company operating in many countries with various policies and coronavirus transmission situation.

The health and safety of our team remain our top priority. The company is constantly reviewing the situation to protect the safety of its employees and the integrity of its operation and will offer updates when conditions change materially.

Intralot has operated as a public listed company operating on both B2B and B2C markets for already 28 years, since 1992. It provides and operates gaming solutions, online and offline alike, in 42 countries all over the world. The range of its services is enormous and includes providing equipment, software solutions, and maintenance services for the gambling industry players, as well as management services like managing operations on a day-to-day basis, gambling-related marketing, risk management, etc. Pre-COVID-19, Intralot boasted impressive numbers related to their operations: €18.3 billion handled in wagers every year, €0.7 billion annual turnovers, and 3,800 employees worldwide.