New National Lottery operator Allwyn sees near-doubling of revenues

Allwyn has seen half-year turnover nearly double after snapping up National Lottery operator Camelot and hailing resilient demand despite cost pressures on consumers.

The Czech company reported total revenues of 3.7 billion euros (£3.2 billion) for the six months to June 30, up from 1.9 billion euros (£1.6 billion) a year earlier.

Revenues in the second quarter jumped 115% higher to 2.05 billion euros (£1.8 billion), the group said.

Its performance was boosted through the takeover of Camelot UK and Camelot Lottery Solutions, which runs the Illinois Lottery, in the first quarter of 2023.

With the newly acquired firm stripped out, Allwyn said revenues rose 12% in the first half to 2.1 billion euros (£1.8 billion) and were 7% higher over the second quarter.

Underlying earnings, excluding the Camelot businesses, rose 18% over the half-year to 649.8 million euros (£555.9 million).

The group said consumer confidence was being affected by the cost-of-living crisis but that its business saw “only a limited impact”.

It said demand remained resilient “due to the low price point of our products and low average spend per customer, as well as our large number of regular players”.

Allwyn also said its business has been shielded from much of the wider cost inflation, given that “a significant portion of our costs is directly linked to revenues and the low proportion of energy in our cost base”.

It added that trading since the end of June has continued to hold up, “despite a background of relatively weak general consumer sentiment”.

“Current trends are in line with the resilience of our revenues during previous periods of weaker general consumer sentiment – for example the early period of the Covid-19 pandemic, the Greek financial crisis and the global financial crisis – when demand for our products remained resilient, especially in comparison with other consumer sectors,” Allwyn said.

In the UK, the Camelot business saw total revenues fall 3% on a comparable and constant currency basis in the second quarter, which it said was largely down to “exceptional” EuroMillions rollovers a year earlier.

UK second quarter underlying earnings lifted 18% to 50 million euros (£42.8 million).

Allwyn is preparing to take over the running of the next National Lottery licence from February next year after winning the contract from Camelot last year.

Allwyn’s acquisition of Camelot closed a bitter legal wrangle between the firms after the Gambling Commission decision, although the two companies are continuing to operate separately.

The Czech company, previously known as Sazka, also runs lotteries in Austria, Italy and Greece.

Robert Chvatal, chief executive of Allwyn, said: “The good performance in our existing geographies was driven primarily by strong growth in digital, where we have sustained our momentum in product development and innovation.

“Alongside this, we continue to evolve and digitise the customer proposition in physical retail, while during the quarter we once again saw resilience of demand for our products, even in an environment where consumer spending remains under pressure.”