Stride Gaming Posts Resilient Revenue Forecast Despite UKGC Fine

Online bingo operator Stride Gaming is expecting to post a £3 million revenue jump, despite facing a £4 million fine from the UK Gambling Commission (UKGC).

Financial report

The latest financial report from Stride Gaming shows an increase in revenue despite an impending fine from the UKGC. (Image: snic.com.bh)

In a note to market, the AIM-listed company reported that revenue to the year ending August 2018 was up from £82 million to £85 million. However, despite the increase in overall revenue, adjusted earnings before interest, tax, depreciation and amortization (EBITDA) was predicted to drop by not more than £16 million.

Resilient in the Face of Regulatory Issues

Offering some insights, Stride Gaming gave a positive outlook and pointed to tough market conditions for the projected 20 percent drop in EBITDA.

“This resilient performance has been achieved against a backdrop of more challenging trading conditions, including higher taxation and implementing further measures to ensure that Stride continues to maintain high standards in the provision of responsible gaming,” reads the official report.

Although formal action is pending, Stride Gaming was notified in the summer that it will be hit with a sizeable fine. After reviewing the company’s operating policies, the UKGC found that Stride was falling short in a number of as yet undefined areas.

Reacting to the notification, Stride notified investors that it was facing a ”significant financial penalty” but was working with advisors to address the situation. When the news broke on August 2, the gaming operator saw 33 percent wiped off its market value, but the recent report suggests it has recovered slightly since then.

UKGC Continues to Raise the Regulatory Bar

At this stage, the British operator is expecting to pay a fine of around £4 million before the close of 2018. However, the full impact of its licensing failures won’t be known until the UKGC completes its review process.

Irrespective of the pending action, Stride Gaming has shown it can roll with the punches. More significantly, the recent financial report is an example how UK operators are having to adjust their financial expectations in light of increasing regulations.

The UKGC has continued its aggressive stance on regulatory failures throughout 2018. With the threat of seven-figure fines looming in the background, operators have no choice but to fall in line or risk seeing their revenue fall into the red.

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