Q2 Report Shows Poker is Losing Influence at PokerStars

August 9th, 2017 | by Jason Reynolds

PokerStars’ parent company, The Stars Group Inc., has seen its Q2 revenue increase by 6.8 percent to $305.3 million despite a drop in poker revenue.

PokerStars welcomed more players and earned more money from its non-poker assets during the second quarter of 2017. (Image: casinonotizie.net)

The latest set of Q2 financials from The Stars Group show that online poker revenue dropped by 5.9 percent compared to the second quarter of 2016. Even excluding the impact of an annual shift in exchange rates, the drop on last year’s total would still be 5.6 percent.

On top of revenue falling to $202.9 million, the significance of poker at PokerStars’ is decreasing. Compared to Q2 2016 when poker rake represented 75.5 percent of the company’s overall revenue, the latest figures show a 9 percent drop to 66.5 percent.

Non-Poker Revenue on the Up

In contrast, casino revenue now accounts for 29.3 percent (compared to 20.9 percent) of the site’s combined earnings. When sportsbook revenue is also taken into account, non-poker betting on PokerStars generated $89.6 million in Q2, which is a 50.2 percent year-on-year increase.

In light of the recent figures, The Stars Group has advised that its full year financial projections will remain unchanged in terms of total revenue. However, thanks to a significant increase in non-poker revenue, plus the introduction of the new Star Rewards loyalty program, “adjusted net earnings” expectations have been increased to between $413 million and $437 million.

In practice, the latest financial report reflects the changes players have seen take place since 2014. When Amaya purchased PokerStars from the Rational Group in June 2014, the site was already starting to introduce non-poker options.

But following the $4.9 billion deal, Amaya increased the speed at which the changes were being made and gradually started to shift the site’s focus away from high volume players.

A Change Has Proved Positive for PokerStars

Alongside the introduction of sports betting and casino games, new poker variants such as Spin & Go tournaments and Beat the Clock have increased the pace of certain games and, in doing so, decreased the level of skill required to win.

This push to attract more casual players that want to bet on a variety of games and not just poker has caused a fundamental shift in the way PokerStars generates its revenue. Although poker remains its largest asset, PokerStars executives stated in the latest report that the site is now one of the largest online casino platforms in the world.

The change in strategy may have angered some long serving players, but it hasn’t had an adverse effect on new sign-ups. In fact, the Q2 data shows that customer registrations were up by 2.1 million to 113 million in the second three months of the year.

Even with the recent news that Australia has passed a bill that will see PokerStars leave the market, the recent figures suggest the company is still benefitting from its recent change of tactics.