Profitability and liquidity of italian gambling companies: quantitative profiles before and during the pandemic for covid-19

Guido Migliaccio,Monica Di Stazio

doi:10.36004/nier.es.2021.2-03

Abstract

Topicality - One might think that the pandemic has had a devastating effect on gambling businesses, due to the long closures of arcades. This could have also damaged public finances, considering the revenue from taxes and duties, the fact that the serious social risks due to possible deviance. Purpose - This research analyses the economic and financial dynamics of Italian companies between the two major international crises, while also trying to verify possible relations with the general economic cycle. Research methods - The financial statement data of about 1200 firms with a turnover of more than €800,000, for the 2009-2020 decade, were analysed, illustrating the average trends of Roa and Quick Ratio, for Italy and each of its macro-areas (North, Centre, and South). The data have been subjected to statistical processing. The Anova and Tukey-Kramer methods were used for comparison between macro-regions. Results - The companies in the sample have an irregular but always positive and increasing ROA, with some exceptions. There are no significant differences between the different geographical areas. An excellent short-term financial situation is evident everywhere, with increasing and sometimes excessive cash balances. Implications - This study implements the economic literature on these companies, which is lacking. It confirms some of the findings of other scholars who have already highlighted the reduction in profitability during crises. However, other authors have highlighted similar profitability trends in other sectors. This quantitative research highlights the high earnings that justify proliferation. Public policies should be attentive to the sector that implements national GDP, but can generate serious social pathologies. In the theoretical profile, the aggregation of balance sheets used, however, organised, can prospectively become a useful model for interpreting complex phenomena.

Highlights

Studies and debates have followed one another in a necessary interweaving of psychological, sociological, legal, and economic aspects (La Rosa, 2016a), while the reflection on the managerial and economic-financial characteristics of the companies of the sector to which this contribution is dedicated became relatively marginal, answering some questions: RQ1: what was the trend of profitability in the decade considered? RQ2: How did the financial dynamics evolve? RQ3: has the location of companies affected profitability and financial balances? RQ4: What have been the effects on the sector of national policies to deal with the pandemic? Everything refers to the Italian context, which may be a useful reference for other countries
ROA assesses the profitability of invested capital
The copious studies on the psychological, sociological, and legal aspects of gambling are complemented in this paper with a quantitative analysis derived from the study of the trend of two ratios that well express the short-term profitability and financial balance

Summary

Introduction

It becomes so when it compromises psychophysical balance (Galimberti, 2019). Few specialised suppliers of equipment, gaming software, if not self-produced, and financial transactions characterise the industry supply chain (Vaughan-Williams & Siegel, 2013). Growth and business development possibilities depend on the physical or virtual market or the differentiation and diversification of games. Studies and debates have followed one another in a necessary interweaving of psychological, sociological, legal, and economic aspects (La Rosa, 2016a), while the reflection on the managerial and economic-financial characteristics of the companies of the sector to which this contribution is dedicated became relatively marginal, answering some questions: RQ1: what was the trend of profitability in the decade considered? RQ3: has the location of companies affected profitability and financial balances? The main results, implications, limitations of the research, and possible developments of the study with critical considerations and conclusions

Objectives

Methods

Results

Conclusion