Playtech Takes Measures to Protect Online Casinos Cash Flow Amid The Coronavirus

Posted in USA Online Gambling News by No Comments

Playtech Takes Measures to Protect Online Casinos Cash Flow Amid The Coronavirus
The overall impacts of the global coronavirus outbreak are about as wide as it gets. Almost every industry and every individual business is currently feeling the effects in its daily operations. Even online gaming giants such as Playtech are not immune to the overall business disruptions.

While the company is big in online casino gambling, that is not enough to insulate its other business interests. Losses in live-dealer casino games and online sports betting are two major concerns right now. The company is suspending its share buyback program and dividend payment plan.

How Is Playtech Taking Measures to Protect Their Cash Flow Amid The Coronavirus?

This decision was made by Playtech’s Board of Directors. Initially instituted based on positive business performance in 2019, uncertain times have already impacted Q1, 2020. The plan is to proactively manage cash flow and working capital. Plans are also in the works to implement other cost-saving measures. All the intended actions are designed to not impact long-term initiatives fueling business success.

The savings from suspending share buybacks and dividend payments are estimated to be $70.2 million. This could increase depending on how long this decision remains in place.

So far, the company’s online casino business has experienced increases in online bingo and poker. The longer term concern is the lack of discretionary funds for online gambling activities.

live dealer table game play could be impacted if more live studios are forced to close. One operation in the Philippines has already been suspended. Other locations in Latvia have been able to fill the void for now. The company has yet to rule out other possible closures. However, there are contingency plans in place to limit any disruptions in service.

Playtech is also big in online sports betting which has taken a tremendous hit. The company operates self-service betting terminals in several regulated markets. Sports betting was forecasted to provide 10 percent of the company’s EBITDA in 2020. Each month’s loss is expected to be $4.3 million the situation remains unchanged.

The company also operates numerous subsidiaries around the world related to sports betting. The overall impact has yet to be calculated.

Many companies with strong ties to the sports betting industry have already experienced negative impacts in the share price. Companies such as William Hill and Flutter Entertainment have issued profit warnings to investors.

Playtech’s overall goal is to adapt its financial stance in light of uncertain business conditions. This has turned into a very fluid situation that cannot be defined by a specific time table. Given the truly global positioning of all its business interests, impacts can be greater in certain high risk regulated markets.

Cost-cutting measures can provide temporary relief. Yet, Playtech is trying to avoid any detrimental measures that will negatively impact the long-term marketing plans. That can be hard to do given the overall volatility of the current situation. The company’s overall size and current economies of scale remain in its favor. The duration of these market disruptions will ultimately define its overall performance in 2020.

Slotocash Casino
 Playtech Takes Measures to Protect Online Casinos Cash Flow Amid The Coronavirus
Article Name
Playtech Takes Measures to Protect Online Casinos Cash Flow Amid The Coronavirus
Playtech Protects Online Casinos Cash Flow Amid The Coronavirus. Big Losses in live-dealer casino games and online sports betting.
Publisher Name
Play Slots 4 Real Money
Publisher Logo

Tagged with:

Show Buttons
Hide Buttons