Betting News
Magnum lottery ticket sales impact by MCO 3.0
Magnum lottery ticket sales impact by MCO 3.0
June 18, 2021 Authorbjbajian
Even though Magnum Bhd's shops remain open, the movement control order (MCO) 3.0 is expected
to restrict ticket sales as customers exercise prudence and avoid crowded
areas.
According to RHB Research, some punters may buy from illicit operators because
of transaction convenience, reducing revenue for legal number forecast operators
(NFOs).
Given the somewhat inelastic nature of the number forecasting business,
ticket sales should rebound strongly once things return to normal.
The disruption in
ticket sales during MCO 3.0 was considered by RHB Research as a short-term stumbling block,
especially with the vaccination distribution.
According to the report, even in a
bleak macroeconomic climate, NFOs are resilient, and demand is relatively
inelastic.
When most outlets were temporarily shuttered from January 13 to February
15, it reported ticket sales hovered around 20% of pre-pandemic levels, citing the MCO 2.0
as an example.
Since reopening on February 16, ticket sales have quickly recovered to
around 80%-85% of pre-pandemic levels.
According to its jackpot prize aggregation,
average jackpot ticket sales in the first quarter of 2021 fell by around 18%
quarter-over-quarter (q-o-q) and 32% year-over-year (y-o-y). This is the case despite a more
considerable average jackpot amount of roughly 27% q-o-q and about 23% y-o-y.
RHB
Research has decreased Magnum's financial year 2021-2023 earnings by 10.4%-4.3% due to the
scenario after lowering its ticket sales expectations.
The research firm also
decreased its target price from RM2.97 to RM2.73 per share.
However, it favours the
company because of its excellent 7.6% yield for the fiscal year 2022.
RHB Research
believes that the passage of tighter gaming rules and the eventual monetisation of its share
in U-Mobile could provide more earnings upside.