Lockdown and table tennis
The lockdown brought the leagues to a halt. Unexpectedly, we lost the basic raw material for bookmaking products, i.e. sports games - says Konrad Komarczuk, president of Fortuna Zakłady Bukmacherskie.
The betting industry is one of the hardest hit by the coronavirus pandemic. And at the beginning of the year, nothing announced that. How did you go this year?
I can only speak for my company. In 2020, we entered in good shape. We closed 2019 with a good financial result. The beginning of this year was also good. In January and February, we did better than the year before. And that's about 1.5 to 2 times. This further improved our cash position. So we entered 2020 full of optimism. The ebitda was three-digit, a double-digit financial result, approaching a three-digit one.
And the pandemic came.
The biggest problem for us was the lack of a product. The leagues have stopped, the games have been stopped. We suddenly lost the basic raw material for bookmaking products, i.e. sports games. Bookmakers live off betting based on sporting events. When there are no events, there is nothing to bet on and there is no income for the bookmakers. Our budget for this year was planned primarily on the basis of the European football championship. This type of event builds for us not only the current year, but also the next one. It is a very strong acquisition element. During the European and world championships, we gain a lot of new customers who stay with us for several months. And this builds our income for the next year as well. Meanwhile, in mid-March, the world closed and we have little to sell. Customers began to move to what else was on offer, i.e. completely abstract football leagues, such as Belarus, Nicaragua. The popularity of esports, competitions that are played partly remotely, began to grow in popularity. We introduced early abstract games, such as table tennis from Ukraine or Russia. All this to somehow fill this hole.
Perhaps political bets were a bit more popular? Even about the election results.
They have always been in our offer. This is not a lockdown issue. Some customers were probably more interested in it, but we did not see any great increases compared to what was before. Political bets are, moreover, the margin of our income. A novelty was also simulated leagues, where the game is based on team statistics and their random results. So it was not a fun period.
Have you closed your lottery offices? Did you fire people?
We decided to close almost 400 stores for 6 weeks. We sent over 800 people home, paying them further salaries. However, we did not make layoffs due to the coronavirus or lockdown. We continued our strategy here, we did not close a single store more than what was in it before, before the pandemic, we planned by building our budget. All we've done here is we've sped up some of the closings by roughly two months. But I repeat, we only closed what was on the closing list anyway and it was mainly because we had the capacity to do it, our technicians had less work than usual.
Did the whole situation, the lack of games, the lack of a product, affect your financial results?
It is known that it bounced back. And it is very important. However, it must be remembered that not only the revenue side has decreased, but also the cost side, and it is quite significant. Most of our monthly expenses are related to marketing, advertising, e-marketing, affiliate fees. So I still believe that we will make the financial result, which we assumed for 2020, with a correction of a dozen or so percent.