Paddy Power, one of the most well-known providers of online and retail betting services, has endured a multi-million dollar loss so far this year. The loss of $65 million is the consequence of a collaboration between Paddy Power and Betfair. The cost to Paddy Power of joining forces with Betfair was well over $260 million, a significant gamble by any estimation.
Paddy Power Betfair finances
Paddy Power Betfair has released details of their finances for the first six months of 2016. Between January and June this year, the newly formed betting giant lost over $65 million. This is especially significant when compared with last year’s results which revealed a profit of over $140 million. This profit was achieved in the aftermath of the merger, which cost both parties in excess of $257 million.
The losses sustained by Paddy Power Betfair were a little surprising, as they reported an 18% increase in revenues – the total amount of revenue for 2016 being $1.003 billion. In 2015, the total amount of revenue generated was $848.76. The revenue that was collected by online operations in 2016 increased by 20%, to $581.7 million. This increase is the result of a growth of 21% in sports betting, and 20% in games played for financial gain. The Australian wing of the organisation, Sportsbet, announced that their revenues for 2016 have increased by 17%, when compared with the same period of time last year.
Breon Corcoran, Chief Executive Officer, has commented on the losses this year. He says that the merger between the two companies has been progressing as expected, and that he is happy with how things are going so far. Corcoran expects both revenues and profits to increase in the coming months, and says ‘Our strong market positions, increased scale and enhanced capabilities position us well for sustainable, profitable growth’.