Intralot’s Net Losses Increased in 2019
Intralot, a Greek gaming and lottery operator has experienced an increase in its net loss on its operations over 2019, which it describes as a “transition year”. The net losses of the operator amounted to €111.9 million and the turnover of the group and the gross revenue also each fell during the year.
Interestingly, the amount of money that was bet using Intralot’s services and other brands increased by 21% in 2019 compared to what it was the previous year. This figure grew to €18.3 billion. While this figure increased, the turnover of the operator had decreased to €720.6 million, which represents a drop of 8.1%.
The reason that Intralot gave for this decrease in turnover was that its licensed business to customer operations and its management reporting branches each saw declines in the figures that they had been putting up previously. These declines were compensated for an increase in turnover from its technology and support services branch, but this was not enough of an increase to mitigate the losses completely.
In detail, the operator’s licensed operations dropped to €442.8 million, which represents a drop of 9.9%. This loss was accounted for by the relatively bad results that the company saw from its Eurofootball sportsbook division that operates in Bulgaria.
The losses that the business incurred in Argentina were caused by fluctuations in exchange rates, according to Intralot. These fluctuations were responsible for €9.0 million of the decrease in the turnover. This is likely a sore subject for Intralot because if the amount was accounted for purely in the local currency, the business would have seen a 22.7% increase in turnover.
The largest losses that Intralot saw during 2019 came from the management division of the company. This loss was for €69.5 million, which is equivalent to a drop of 23.0% on the previous year’s takings. The explanation that was given for this by the operator was related to the disappointing results that it saw in Turkey during the year.
In Turkey, Intralot’s Ineltek venture did not win its bid to run the national sports betting monopoly in the country. This contract was instead won by a consortium that was backed by Scientific Games. The management losses also stemmed from contracts in Morocco and Russia that both ended during the year and have not yet been replaced.
The turnover that the business saw in Morocco had dropped as well, however, and was not just from the ending of contracts. Here, the revenue dropped 11.3%, which was caused by a decline in the numbers of sales in numerical games.
The one area of the business that saw growth during 2019 was the technology and support services department. This division of the company grew 2.7% to €208.3 million, mainly from a contract that was signed with the Lottery in Illinois in the US. This lottery began in February of 2019 and generated a large amount of revenue for Intralot.
Another lottery-related revenue that was beneficial for the company last year was the sale of equipment in the state of Arkansas. There was also an exceedingly large jackpot during the first quarter of the year that helped the division to pull in sales and to boost its profits.
Other notable strong performances from this division of the company came from the Netherlands, where sports betting proved to be a valuable resource for the business. Operations based in Chile also saw a slight increase in turnover.
Intralot also renewed its contract with the New Hampshire Lottery at the end of the year. This contract ensures that the operator can continue to power the state lottery in New Hampshire and allows it to offer limited types of sports wagers at the 1,300 lottery kiosks in the state.
These increases helped the business to offset some of the lower sales numbers that it saw elsewhere in the world. For example, in Greece, the change-over period between contracts with OPAP saw Intralot make a loss for the year.
What These Results Mean for Intralot
Overall, for the year, the gross gaming revenue for Intralot stood at €409.1 million for 2019. This represents a decrease of 6% on the same figure from 2018. The biggest hit came from the licensed operations division of the company which fell by 7.4%. This was closely followed by management losses of 5.2%.
The chairman of the business released a statement on the financial results of Intralot for 2019. In this statement, Sokratis Kokkalis pointed out that the previous year was a transition period for the operator and, as such, the figures should be taken with a pinch of salt as they are likely to rise in the future.
The transitional nature that Kokkalis was talking about relates to some of the redevelopments of the business that Intralot underwent in 2019. During the year, the company divested stales in some of its assets, which included Gamenet in Italy and the Hellenic Lotteries in Greece.
There was also re-structuring in Intralot’s business model in North America. Here, it is planning to run the sportsbook for the DC lottery.
With these re-developments, the business is set to grow rapidly in the future according to Kokkalis. The chairman holds the view that with the appointment of a new Group CEO in Christos Dimitriadis the company will see a revolution in the technology department which will help Intralot to mitigate the losses that it experienced over the past year.