Party Gaming About Face
Published: Thursday, December 22, 2005 Online-Casinos.com
PARTY GAMING ABOUT FACE
Pessimism in September - upbeat in December
Things change fast in online gambling, and the view from the top at Party Gaming
seems in tune with that. In September CEO Richard Segal had a depressing
effect on the share prices of industry public companies when he took a rather
pessimistic view of the online poker scene; this week it was a different opinion,
widely reported especially by the UK media.
In an interesting interview with Reuters, Segal gave a tantalising glimpse of
things-to-be at Party Gaming, prompting the wire service to write that: "Thanks
to the Internet and television, poker exploded outside its U.S. homeland in 2005,
and PartyGaming Chief Executive Richard Segal sees technology boosting that boom
further in 2006."
The report continues with a review of 2005, in which Internet poker took a firm
hold, sparking three big London stock market flotations, generating revenues of
around $2 billion and launching games and books that are now topping Christmas
lists around Europe.
PartyGaming takes about half of that $2 billion pot, and it has big plans for
further growth, Reuters reveals. And Party Gaming is assessing acquisitions and
everything from mobile phones to interactive television to access more players.
"The beauty of it all is that we've invented nothing new," Segal told
Reuters in a recent interview at PartyGaming's London headquarters. "We're
just taking games that have been around for decades and putting them in people's
homes."
After a high-profile 4.6 billion-pound ($8.1 billion) flotation in June, the owner
of PartyPoker and Starluck Casino, saw its market value soar to more than 7 billion
pounds ($12.3 million).
Cautious words in a September trading statement sent its shares into a dizzying
fall from which it has finally recovered by taking a more aggressive stance against
its competitors.
In 2006, PartyGaming plans to launch its new PartyCasino site to run alongside
its existing Starluck Casino, as well as two new games.
"There will be two new products next year," said Segal. "In the
first half there will be a person-to-person skill game and in the second half
there will be another more akin to casino (gaming)."
PartyGaming will also launch a "shared purse," which will help players
switch from game to game.
"If you want to go from playing on Starluck Casino to PartyPoker, it's currently
the equivalent of going from eBay to Amazon," said Segal. "It's not
just one click away, but that will change."
Apart from making life easier for players, the shared purse will make it easier
for PartyGaming to cross-market its various games to them.
PartyGaming gets 80 percent of its revenue from the United States. But in the
second half of 2006, PartyGaming plans to launch its games in six new currencies
and languages.
"From an investor's point of view, it will do us well to reduce our dependence
on the United States market," said Segal.
But he sees problems in Asian expansion with the regulatory environment, low penetration
of broadband Internet and credit cards and with fraud. "I think Asia is more
medium-term than short-term," he said.
Although casino games and sports betting are transferring to mobile phones successfully,
poker is proving problematic because the games can take longer, during which time
mobile signals can fail.
"A sports bet is very easy to place--it's just one text each way.,"
said Segal. "But imagine you're playing poker and have a royal flush in your
hand, and then you lose connectivity ... We don't want disgruntled customers.
It's early days, and we're still looking at test results, but the indications
are not getting us overexcited about mobiles," he added.
Digital television, by contrast, is proving a promising medium on which players
might soon interact.
"The more distribution channels customers have to play on, the better,"
said Segal. "And interactive television is something we're looking at seriously."
Asked whether PartyGaming was looking to buy a sports betting operation, he said
they were not interested in acquiring companies that took sports bets from the
United States, but they would consider opportunities elsewhere.
