Newgioco Group Inc (NASDAQ:NWGI) said Tuesday that the coronavirus (COVID-19) pandemic has taken a bite out of its sports book revenue, but it has been offset by higher online poker and virtual sports revenue.
The company has temporarily shuttered 150 betting shop locations throughout Italy, but the group stressed that the closing of the physical locations does not affect its continuing online and mobile operations.
In a statement, the Toronto-based global sports betting and gaming technology company said that between March 1-25 overall gaming revenue fell around 20% to $1.54 million, compared to $1.92 million between February 1-25.
Not surprisingly, there was a 42.7% drop in sports book revenue due shuttered betting shops. However, casino, poker and other-than-sports product line gross gaming revenue shot up 16.6%, with the biggest gains coming from online poker and virtual sports.
CEO Michele Ciavarella told shareholders that the group had taken steps to ride out the global crisis by implementing “strategic plans meant to continue providing the highest level of service” to its customers and operators, while keeping the company’s employees safe.
“We are happy to have maintained a manageable level in our diversified sales channels given the headwind caused by complete shutdown of global sports,” said Ciavarella.
“Our objectives are to be prepared for re-opening our betting shops, putting our agents back to work and look forward to continuing normal operations along with the return of sports events once it is safe to do so,” he added.
Newgioco said it has been processing about 200 to 300 online account applications daily since the government-imposed quarantine took effect on March 8. And the company has implemented a smart-work collaboration initiative to permit office staff to work from home during this period.
Newgioco said that as revenue remains “reasonably stable,” it has “sufficient available liquidity,” and bank facilities to enable it to fund its current obligations for "the foreseeable future."
Additionally, the company said a variety of government-backed financial initiatives were available to assist with 70% of employee salaries on their return to work, deferral of rent and other expenses, as well as offset costs related to agents that operate betting shops.
Newgioco conducts its business primarily through an internet-based betting distribution network on its website, as well as in retail neighborhood betting shops throughout Italy. It offers a suite of leisure gaming products and services, such as sports betting, virtual sports, online casino, poker, bingo, interactive games and slots.
The group also owns and operates innovative betting platform software providing both B2B and B2C bet-processing for casinos, sports betting and other online and land-based gaming operators.
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