Stride Gaming to Receive Fine

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Stride Gaming

UK-based online gambling company Stride Gaming is expected to receive a fine of around £4 million from the UK Gambling Commission.

The operator has many well-known brands under their wing like Kitty Bingo and Magical Vegas Casino. They launched in 2012 with the online casino Spin and Win and have been bringing more brands into their network ever since. Their managing officers have many years of experience in the online casino and bingo industry; having been part of teams which helped in the £60 million sale of Wink Bingo to 888 Holdings Plc in 2010. It is therefore surprising that such experienced practitioners have allowed compliance issues within their company that have resulted in such a fine.

The brand is also thought to have a share of around 25% of the UK’s online gambling market, one of the biggest in the industry. It will be interesting to see how such a fine will impact the trading and the market as a whole since Stride has such a significant interest.

The UKGC have imposed the fine for lack of compliance following their review into Stride’s activities. The brand notified their investors of the fine in early August and have resolved to be able to pay the fine by the end of the year.

Stride’s 2018 trading results are expected to be published on the 21st of November 2018 and followers of the case will be keen to see how this fine has impacted upon their trading.

Many different UK brands have seen a decline this quarter without also having fines to pay. At a minimum, Stride has predicted a 20% decline in their EBITDA performance to £16 million. However, it has thought that their net gaming revenue (NGR) would have increased from last year’s £82 million to about £85 million.

Stride’s CEO Stuart Eitan Boyd released a statement saying: “I am pleased to report that the group has traded well during the second half of the year despite a number of headwinds impacting the UK online gaming market.”

“Our focus remains on delivering further market share growth in the UK, driven by continued product innovation and increasing player loyalty. This is underpinned by the strength of our proprietary technology as well as our proven business analytics capabilities.”

"We have an excellent technology platform as well as a highly experienced team driving the Group forward, and as a result we look forward to the future with confidence."

While Boyd seems optimistic about the future of the company, a quick look at their stocks shows that the price of Stride’s shares has been falling consistently. While they recovered from the dip of the fine’s announcement, the share price has then steadily dropped to about 94p; a vast difference from February’s 234p and September 2015’s 310p.

We will await the release of Stride’s trading results with anticipation. As a company with such a large stake in the UK market, it is clear that their performance will have some sort of impact. Only time will tell what that impact will be.

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