PokerStars — historical drop in revenue
Although Worldpokerdeals no longer works with PokerStars, usually what happens to the site is important for the entire industry as it's recognized as the market leader. And that's why in this article we analyze the latest financial report published by The Stars Group, corresponding to the first half of 2019.
In general, the positive numbers of the holding are supported by Sky Betting & Gaming. The British company was bought by Stars back in mid-2018, but the agreement was approved only at the end of last year and was fully reported only as from January 2019.
The Stars Group reported a "consolidated revenue" for the first half of 2019 of $1,22 billion, 51% more compared to the same period in 2018. But the trick is that Sky Betting accounts for one-third of this result. So only this purchase allowed The Stars Group (TSG) to show such impressive growth rates.
As for our area of expertise, PokerStars had a pretty lousy quarter; it may rightly be called "the worst first quarter of the company’s history."
- The revenues from online poker for the second quarter amounted $191,5M.
- The profits share of the holding from online poker was 30%.
What do these numbers mean?
For the first time in 5 years, PokerStars has generated less than $200 million in revenue in the quarter.
For the first time in the history of The Stars Group, online poker was not the main source of company and is already losing with sports betting and casino (although only 0,4% compared to the last one).
At this rate, in a couple of years, The Stars Group can be called a British gaming holding (the number of active players from the UK is already more than in the .COM segment) with a standard distribution of income in the industry, in which the online poker share barely exceeds 10%.
How does the report explain the PokerStars failure? According to the PS team, the whole situation is due to the unfavorable exchange rate fluctuations and several obstacles to regular operation in some markets such as Sweden or Russia. In short, the management of the poker room is doing everything right, and the causes of the PokerStars crisis are external.
Conclusion
These reports confirm the forecasts about the end of Star's hegemony on the online poker market, which has lasted several years. In fact, in the last month of the second quarter, PokerStars lost the first position in the PokerScout ranking for some time.
This adds to the fact that Stars has a massive loss of players (8 to 5 times) compared, for example, with partypoker within the last year and a half.
In our opinion, the poker room needs to perform some radical changes to reverse the situation — the exchange rate fluctuation sounds just like excuses for investors. PokerStars have conducted several experiments this year, including changes in the game formats and even with a new client: Aurora. Next fall is an opportunity for the room to change some policies that had been a detriment to the players' experience.
And for those who have lost all hope in the PokerStars revival, Worldpokerdeals is ready to offer many great rakeback deals in dozens of other rooms. Please contact our crew for advice on where to play online poker in 2019.
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