The coming together of Paddy Power and BetFair has yielded results on expected lines at the end of the first fiscal year, much to the joy and relief of the investors. If the initial results are indicative of the success of the experiment, both the revenue and profits are likely to shoot up substantially in the times to come. Enthused by the initial fiscal reports, Paddy Power BetFair is planning to unfurl several business plans over the next few months.
Though the online gambling scenario is continuing to be very vibrant, the world over, profits however are being eroded now. If, competition and rising cost of establishment account for the downtrend in profits, new taxations imposed on the sector by the governments cut down the profits of the companies, very much. Paddy Power BetFair presents a good case study in this regard of online betting companies ending up with lower profits, in spite of the companies improving on their sales figures.
The new taxation amendment that the government of UK introduced has in fact been responsible for Paddy Power Betfair not showing a higher percentage of profit. If profits had been calculated as per the previous years, the merged entity could have easily shown a profit of 50%. This year, online gaming companies were required to pay assorted taxes including product fees, machine games duty and point of consumption tax. Paddy Power Betfair paid up as much as 66 million Euros this fiscal as taxes, which have been imposed now, thereby bringing down their profits.
How Betfair and Paddy Power Performed This Fiscal?
Overall revenue of Paddy Power Betfair shot up by about 23% this fiscal, aided by a hefty 28% increase in sportsbook and another 10% increase in online gaming. Revenue from mobile platform also increased to spectacular levels as over three fourth of all mobile users opted for the betting services of Paddy Power Betfair at least on one occasion. Paddy Power Betfair thus posted a healthy profit of 152 million Euros in its first fiscal.
Break-up of Betfair and Paddy Power Revenue and Profit
Role of the Australian arm of the company is significant in the performance of Paddy Power Betfair. In fact, but for the variation in the accounting calendar in Australia and UK, overall performance of the company could have been better. In fact, more than half of revenue and profit for the company has come from Australia. Likewise, figures for the earnings from UK and Ireland have shown a remarkable upward journey.
Retail points too have been strengthened in UK and Ireland, with increase in the number of outlets, which augurs well for the future. All these figures have made the entire team of Paddy power Betfair buoyant and eagerly waiting for happier developments through the year 2016. Chief Executive of Paddy Power Betfair, Breon Corcoran, while being confident about the company’s future, is cautious about how their technical know-how has to be abreast of the time to continue their successful run.