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NEWS 25 March 2020

Online gaming share prices rise as much as 62% in last week

By Tim Poole

As stock market prices tumble across the globe, online gaming companies have seen significant share price growth across the last week.

Though gaming companies generally have been caught in the midst of the coronavirus pandemic where share value is concerned, 888 Holdings has seen a 62% share price rise within the last seven days, while NetEnt has seen its stock rise 42% and Playtech 28%.

Even for some land-based US giants like MGM Resorts International and Caesars Entertainment, the last week has seen marginal growth as investors come to terms with the implications of the coronavirus’ spread.

But online companies in particular have seen far sharper increases, while companies like Flutter Entertainment have also seen higher bouncebacks, likely due to their digital arms.

Indeed, though stock prices remain lower than they were pre-coronavirus across the board, we may be seeing somewhat of a redistribution of investor interest towards online gaming firms.

Operator 888 recently reported its sports betting segment had taken a hit but that online casino and poker saw growth in demand.

With only 16% of its 2019 revenue deriving from sports betting, 888 is in a far stronger short-term position than other operators for whom sports is such a strong vertical.

Evolution Gaming has also seen a 6% growth in share value, having stated demand has not fallen for its live casino products.

Playtech recently said it has seen "limited impact" towards its B2B business, with the company’s poker and bingo businesses seeing increases in activity.

Meanwhile, NetEnt is still benefiting from its acquisition of Red Tiger, announcing this week it will accelerate integration between the two online casino companies.

While sports betting has virtually come to a standstill, with the Olympics becoming the latest major event to be postponed (until 2021), online casino, poker and bingo providers have seen business remain largely unaffected, if not improved.

Sports wagering companies will have to seek alternatives, like esports and virtual sports, but for gaming companies focusing on non-sporting games of chance, investors remain convinced of their chances to continue generating cash flow.

It is also no coincidence companies such as Evolution and 888 operate purely on a digital basis. While the retail and land-based sectors have taken a significant hit, the ability to play mobile and online games has never been easier for customers.

RELATED TAGS: Online | Financial | Industry
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