The British-based parent company of Television Games Network reported strong revenue growth for TVG in 2017, but the overall results for its U.S. operations were dragged down by significant increases in expenses at other business units in the U.S.
Revenue from the four U.S. businesses rose 15 percent at U.S. exchange rates to $151.4 million, according to the company, Paddy Power Betfair, with TVG generating $140 million of the revenue figure. However, expenses for all four units were up 36 percent, the company said, in part because of start-up costs in a new business, DRAFT, which offers online daily fantasy sports.
In a statement accompanying the financial results, Paddy Power Betfair said TVG remained profitable, and that the four U.S. business units contributed $5.6 million in earnings before interests, taxes, depreciation and amortization, a metric known as EBITDA that roughly equates to cash flow.
The statement said that “profit growth at TVG” and the company’s online casino in New Jersey was “offset by start-up losses incurred in DRAFT and the Betfair Exchange,” which is an exchange-wagering business restricted to New Jersey residents that was launched in 2016. The statement said that losses at DRAFT and the Betfair exchange were approximately $208,000, and that it expected those losses to recur at a similar level in 2018.
Paddy Power Betfair said it remained committed to its U.S. businesses in part because of the potential for “positive regulatory change results in the market for sports betting,” a reference to a pending Supreme Court ruling that could repeal prohibitions on sports wagering. The case at the center of the ruling was brought by New Jersey gambling interests who are seeking to legalize sports betting within the state’s borders.
Source : http://www.drf.com/news/mixed-2017-financials-reported-tvg-parent-company-paddy-power-betfair295