The European business (incorporating the financial results for the Emerging Markets Division) continues to grow strongly with the amount wagered on sports increasing by 21.4% to £917.5m (2008: £755.5m), generating a gross margin (pre bonus adjustment) of £93.6m (2008: £75.4m) up 24.1%. European casino and games revenue grew by 12.6% to £43.7m (2008: £38.8m) whilst poker revenues declined by 7.6% to £22.0m (2008: £23.8m).
The number of sports bets placed rose by 12% to 57.5m (2008: 51.5m). The continued increase in popularity of in:play betting has been a significant driver of the volume growth over the past year. In:play betting accounted for 56% of the value of bets placed during the year. This popularity is evidenced by the number of bets per customer increasing to 134 (2008: 111). The average bet size was up 9% to £15.97 (2008: £14.66) leading to yield per sports customer increasing from £161 to £216.
During the year, a sports gross margin of 10.2% was achieved (2008: 10.0%) despite the increase of in:play betting which tends to have a lower average margin due to the greater proportion of straight wagers (versus multiple bets) than pre match betting. This margin has been achieved through absolute focus on accurate odds setting, risk management and investment in the underlying technologies to allow the team of highly experienced traders to maximise profits from the wagers that are taken.
Over the past 24 months, the European business has undertaken a thorough review of its customer database. As a result of this analysis, the Group implemented a change in marketing strategy to move from a ‘quantity at any cost’ to a ‘quality and value’ approach. The marketing focus is now prioritised on those customer segments that provide a significant contribution to Group performance. This has resulted in a movement away from mass market recruitment towards the recruitment and yield management of more valuable players.
