France goalkeeper Hugo Lloris holds aloft the 
much-prized World Cup trophy after the final between France and Croatia in the Luzhniki Stadium in Moscow, Russia, yesterday.
INTERNATIONAL - Bookmakers are already counting winnings from a FIFA World Cup whose string of shock results such as Germany’s early exit meant they came out further ahead than expected.

GVC Holdings Plc, which owns sports-betting companies including Ladbrokes and Sportingbet, said on Wednesday its revenues were boosted in the second quarter by a “better-than-expected gross win margin” from the tournament. That’s the amount they pocketed from beating their customers’ bets.

A big factor was that popular wagers on favorite teams were thwarted early on, said Goodbody analyst David Brohan by phone. “A number of the big hitters got knocked out early doors. A lower number of favorites is better” for bookmakers, he said.

Four-time World Cup winner and defending champion Germany exited in the initial group stage, while two-time winner Argentina lost in the round of 16. UBS and Goldman Sachs, which modeled thousands of potential outcomes to the contest, both got it totally wrong.

“Across the board, you’re expecting a pretty strong gross win margin,” said Brohan, looking ahead to earnings reports from London-based bookmaker William Hill Plc on Aug. 3 and Ireland’s Paddy Power Betfair Plc on Aug. 8.

A home-team bias also may have boosted U.K.-focused operators like GVC, which noted a ramp up in the volumes and value of deposits this quarter, said Brohan. After crashing out early in 2014 and 2010, England surpassed low expectations and fought its way to the semi-finals, the furthest it had reached in 28 years -- which meant domestic fans kept betting for longer. A British heatwave also lifted retail income, said Berenberg analyst Roberta Ciaccia in a note.

England’s semi-final loss against Croatia meant gaming companies swerved a huge potential liability from bets on them winning; shares in U.K.-focused bookies rose in relief the morning after the result. England’s squad -- dubbed the Three Lions by locals after their emblem -- won just four of their seven games, meaning bookies also could have netted cash from disappointed optimists throughout the run, said Brohan.

This year’s World Cup may have been more lucrative than previous tournaments as it was the first where more-complex wagers like same-game multi bets were on offer. These products magnify potential winnings but increase the risk of losses with added variables.

All in all, it was a “clearly beneficial World Cup for bookmakers” said Barclays analyst Patrick Coffey in a note to clients Wednesday.

- BLOOMBERG