Playtech’s investment in the NorthStar casino & sports book in Ontario pays off with positive Q2 2023 financials showing excellent growth! (Photo by Karolina Grabowska on Pexels)
Playtech Brand NorthStar Q2 2023 financials reported an increase of 26% in gaming revenue. The casino operates in the iGaming Ontario market, and recently, Playtech bought a majority share interest in the casino and sports betting online platform.
Before purchasing NorthStar, Playtech was operating as a B2B iGaming supplier for live casino games and online slots, while its sports betting technology is available to sportsbooks in Ontario. On top of this, Playtech can also approach and supply land-based casinos and retail sports betting.
Ontario’s NorthStar casino and sports betting brand is essentially Playtech’s B2C connection to the Canadian online casinos market.
You can hardly blame the London Stock Exchange (LSE) company for wanting to get a taste of the B2C side of this market, as the Ontario market reported over CAD 35B Ontario iGaming Wagers in March this year stemming from its first year in operation from 4 April 2022 to 4 April 2023.
Q2 2023 Highlights
NorthStar Gaming’s Q2 report showcased a promising growth trajectory:
- Revenue Rise: Northstar’s gross gaming revenue hit CAD5.5 million ($4.04 million), showing a 26% upsurge from Q1’s CAD 4.4 million ($3.23 million).
- Handle Hike: The company registered a handle of CAD160.1 million ($117.7 million), marking a 15% increase from Q1’s CAD139.5 million ($102.6 million).
- Margin Movement: The Q2 gross margin stood at CAD1.9 million ($1.3 million), accounting for 40% of the gaming revenue, a noteworthy 61% rise over Q1.
| Metric | Q2 2023 | Increase (%) | Q1 2023 |
|---|---|---|---|
| Gross Gaming Revenue | CAD5.5 million | 26% | CAD4.4 million |
| Handle | CAD160.1 million | 15% | CAD139.5 million |
| Gaming Revenue | CAD4.6 million | 27% | CAD3.6 million |
| Gross Margin | CAD1.9 million | 61% (from 32% of Gaming revenue) | Not specified |
Slapshot Media Makes Positive Contributions
The acquisition of Slapshot Media in May made a noteworthy contribution, adding CAD 3 million in wagers and CAD 100,000 in gaming revenue. This move is poised to extend NorthStar’s reach beyond Ontario. Other highlights include a 55% QoQ growth in readership for its proprietary ‘Insights’ content and an expansion of their virtual casino game portfolio by over 50% since the year’s start.
NorthStar’s CEO remarked: “We see the recent Slapshot Media acquisition as pivotal to NorthStar’s expansion beyond Ontario, and we’re optimistic about the consistent growth through 2023 and 2024”.
Positives
- Solid growth in revenue, handle, and gross margin in Q2.
- Slapshot Media acquisition hints at potential for wider Canadian market reach.
- Readership surge in proprietary content signals brand strengthening.
Negatives
- Significant loss reported in H1 figures.
- Rising costs might be a concern if not offset by future revenue growth.
H1 2023 Summary
NorthStar reported a revenue of CAD 8.3 million for the six months ending June 30. However, costs escalated by CAD 2.8 million to CAD16.2 million, resulting in a loss of CAD 13.5 million for the H1 period. Consequently, no taxes were paid for the six months. An additional CAD 10 million in financing was announced, expected to finalize in September through share issuance and a new debt agreement.
| Metric | H1 2023 |
|---|---|
| Revenue | CAD8.3 million |
| Costs | CAD16.2 million |
| Loss | CAD13.5 million |
CEO Michael Moskowitz attributed this growth to “a rise in account numbers and wagering activity, emphasizing that NorthStar’s premium product has a magnetic appeal. “Our integrated editorial content is attracting customers seeking insights to elevate their betting experience. As we scale, we anticipate our revenue growth to overshadow expenses,”.
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