British bingo operator Tombola’s revenue rose 15.0% to £120.1m (€139.0m/$165.1m) for the year ended 30 April, 2020, but higher staffing costs contributed to profit declining.
The year included around six weeks of lockdowns that saw all bingo halls shut in Tombola’s key markets of the UK and mainland Europe.
Gambling advisory business Regulus Partners estimates that around 60%, or £72.0m, of this total, came from the UK.
Tombola’s costs of sales came to £85.3m, up 19.7%, leaving gross profit of £34.7m, up 4.3%.
The operator then paid administrative expenses of £22.7m, up 10.8%. Much of this spending was on staff, as wages and salary costs were up 13.3% to £15.3m, while overall staff costs grew 12.8% to £17.6m.
This left £12.0m in operating profit, a 6.7% decline.
The business paid interest income, which dropped 87.2% to £50,000, and interest expenses of £33,000.
It paid a further £2.7m in tax, up 35.1%. Tombola’s total tax bill was £3.0m – of which £1.5m was from UK corporation tax, £1.1m adjustments and £468,000 overseas corporation tax – but £330,000 of this was deferred.
After these costs, Tombola’s profit came to £9.4m. This was down 16.6% from 2018-19.
Regulus noted that given Tombola’s strict player protection requirements, including a £500 weekly deposit cap, may offer a glimpse into a possible future for gambling in the UK given proposed regulatory changes.
“While this model works extremely well for Tombola and it helps to ensure a safer gambling environment ‘by product’, it also speaks to the fact that the vast majority of addressable customer revenue, even in a ‘softer’ product range such as bingo, is driven by less restricted products,” it said. “Tombola’s business model is therefore something of a litmus test for tough product restrictions in the UK and elsewhere: it might capture a lot of customers, but it does not capture much revenue.”
