Woolworths has reported a big jump in profits, with the increase largely being attributed to its new gaming business. But how much of that is actually from the gaming side of things?
The Australian supermarket giant posted an after-tax profit of $1.1 billion for the year-ended June 30, up from $660 million a year earlier. Sales revenue also increased to $54.9 billion, up from $52.4 billion in the previous corresponding period.
Gaming has become an important part of Woolworths’ business in recent years, with the company now operating almost 1,200 poker machines across its network of stores. In addition to pokies, Woolworths also offers other types of gambling products such as Keno and scratchcards.
Woolworths CEO Brad Banducci said that the company’s “strong performance across all parts of our business reflects the benefits of our strategy to focus on food and grocery, liquor and convenience”. But it’s clear that gaming has been a key factor in driving the company’s growth in recent years.
The big question is just how much of Woolworths’ profit increase is really due to gaming? The company doesn’t break down its earnings by segment, so it’s difficult to say for sure. However, it seems likely that at least some of Woolworths’ profit increase is due to its growing gambling operations.
This isn’t necessarily a bad thing – after all, Woolworths is within its rights to operate gambling machines if it chooses to do so. But it’s worth noting that gambling can be a risky business, and there is always the potential for things to go wrong.
So far, Woolworths appears to be doing well in the gaming sector. However, it will be interesting to see how things progress over time, and whether or not profits continue to grow at a healthy rate.
Woolworths profit boost thanks to income from playing.3. Woolworths: how much of our profits come from playing?
Income from playing games has been a key factor in boosting Woolworths’ profits for the 2018-2019 financial year. The company’s online gaming division, Big W Games, has seen a marked increase in revenue, largely thanks to its new game “FIFA 19”.
Big W Games is now the second-largest online games retailer in Australia, and it has plans to expand even further in the near future. The company plans to release new games throughout the year, including “Call of Duty: Modern Warfare” and “Pokémon Sword and Shield”.
This growth in Big W Games’ revenue is good news for Woolworths shareholders, as the division is now making a significant contribution to the company’s overall profit. In fact, if it were not for income from playing games, Woolworths would have reported a net loss for the 2018-2019 financial year.
So far, this trend looks likely to continue into the next financial year. Revenues generated by Big W Games were up 41% in the first quarter of 2019-2020, compared to the same period last year. This growth is being driven by an increase in both the number of gamers and the amount they are spending on games.
It remains to be seen whether or not this trend will continue in the long term. However, for now at least, it looks like income from playing games is here to stay – and that is good news for Woolworths shareholders.
According to “The Australian” in 2008, Woolworths made $2.4 billion profit, with about 2% ($48 million) of that coming from its gambling business.
A recent study by the University of Sydney has found that Woolworths makes more than $1 billion each year from gambling. This accounts for almost a third of the company’s profits.
The study also found that the company’s poker machines generate more than $350 million in revenue each year. This is more than any other casino or gambling venue in Australia.
Woolworths has denied that it is exploiting its customers and insists that its poker machines are “entertainment devices”. However, there have been calls for the company to reduce its reliance on gambling profits.
The University of Sydney study comes after a series of corruption allegations against the New South Wales state government. These allegations have raised concerns about the links between political donations and poker machine licences.
It is now believed that Woolworths and other supermarket chains have been donating money to politicians in order to gain an advantage in the gaming licence process.