The past few years have been good to betting companies, both traditional and online. There have been booms in profits, with more and more people signing up for such sites every day. However, not all companies have been operating at a profit. Some have extended themselves too far, with ambitious projects that did not pan out. One of those companies is Bwin, who have had trouble with appeasing their shareholders in recent months. The company has been under increased scrutiny from high profile shareholders, who are displeased at their financial performance. As a result, they have taken cost cutting steps to help resolve the matter.
Cost Cuts –
Bwin will undergo a major cost cutting operation in the coming weeks and months. They aim to slash around CA$ 15 million from their expenses for the coming year. The company has been performing at a modest rate, with its sports betting segment propping up their casino and poker offerings. There is speculation that their cost trimming plan will result in parts the company being disbanded or sold to other companies. Bwin have denied that they will use that option, but nothing is certain.
Their chief executive had this to say on the matter: “In the same way as any other company, we need to improve our financial performance. Steps will be taken during the rest of 2014 and the start of 2015 to get us in a healthy financial position. We want to be at a place where are shareholders are comfortable with the dividends they are receiving. By making several high profile changes in management and operating procedure, we hope to emerge as a healthier, more profitable company.”
2014 World Cup Success –
Major sporting events are always a great time for betting companies. The 2014 World Cup proved a very successful tournament for Bwin, with record numbers of people placing bets on the action. Their marketing campaigns for the tournament were a success, and this should reflect in the coming quarter’s balance sheet.
However, this success does not erase the problems of their poker and online casino departments. There has not been enough innovation or marketing from Bwin on those offerings, with both operating at a consistent loss. Unless they can devise a plan to significantly increase memberships in the coming five or six months, Bwin may have to trim down to a sports betting-only site.
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