The Stars Group reported revenue of $214 million from its international online poker business PokerStars in the first quarter of 2019.
It represents a decline of 12.9% year-over-year, the second consecutive double-digit drop and the largest in the last three years. It is the weakest first quarter in the company’s modern history.
According to the company, much of the drop can be attributed to adverse currency fluctuations. On a constant currency basis, the decline was a more modest 4.5%.
Total quarterly revenue from the international business—comprising PokerStars, PokerStars Casino, BetStars and other associated “legacy” brands, but excluding new acquired businesses in the UK and Australia—dropped almost as much, down 10.8% year-over-year.
This is the first significant decline ever for the international segment, bringing to an end growth in the business that has been near-unfaltering in the last half-decade.
Again, the company had primarily FX markets to blame, with positive growth on a constant currency basis of a reported 2.3%. This notwithstanding, it still represents a notable slowdown attributed to a mix of weak poker and casino performance due to problems in various markets, and adverse results at the sports book.
Due to this, online poker actually grew its share of international revenue from the company on a sequential basis. In Q1 2019, it represented 63% of the business, up from 60% in Q4 2018 and the highest in four quarters.
Gaming revenue across all businesses reached $581.9 million (or $580.4 million when accounting for a $1.5 million “intercompany elimination,” not reflected in the charts below), up 48% year-over-year. This is down to the contributions of the newly acquired SBG business.
Still, compared to the $652.8 million reported in Q4 2018, it is the first time since 2017 than total company revenue declined sequentially.
On a brighter note, quarterly active users in the international segment was effectively flat year-over-year, holding steady at 2.2 million. This does mean that quarterly net yield dipped 7.1% from $165 to $154 per active user (on a constant currency, the group reported QNY grew 2.4% to $169).
Net deposits dipped substantially, from $353 million to $317 million, a 10% decline year-over-year.