Partypoker Boss To Fold His Hand

Published: Tuesday, February 28, 2006 Online-Casinos.com

PARTYPOKER BOSS TO FOLD HIS HAND

But Richard Segal goes out on a high note, with excellent results

Surprise news for the online poker gambling industry mid-week is that Party Gaming/Partypoker CEO Richard Segal is to step down on June 1, with moves already afoot to recruit a new chief executive, probably from outside the billion dollar group.

"The search process has been commenced. It's important that we get the right person, not the first person that comes along although we don't think it's going to be an internal candidate," finance director Martin Weigold said.

The news that Segal (42) was to leave almost eclipsed the solid financial results that Party Gaming announced at the same time.

The company reported its first annual results since the IPO, and says it is aiming to sign up more customers from outside the U.S., where online gambling's legal status remains confused. Customer retention rates are falling as more casual players come on line and competition increases.

Net income at PartyGaming was $293.2 million for the year through December. Sales jumped 63 percent to $977.7 million and PartyGaming signed up a phenomenal 900 000 new customers in the year and added a further 92 838 players in January 2006.

The company will pay a dividend of 5.25 cents a share for 2005, the statement shows. It aims to increase the annual dividend by 10 to 15 percent, Segal said in a telephone interview.

Explaining the background to Segal's decision to move on, Party Gaming chairman Michael Jackson said that the company has an increased need for "quick decision-making.'' He said Segal is the only PartyGaming executive not presently located in Gibraltar.

Segal, who joined Party Gaming in late 2004 and 10 months later led it into a London IPO worth billions, said that he was not prepared to relocate to Gibraltar for family reasons: "I'm putting my family first,'' he said. "What we've achieved in one year I don't think most businesses achieve in a decade, and that needs rapid decisions."

He gave no inkling of his future intentions, but the shares worth GBP 10.7 million ($18.7 million) he reportedly sold in the IPO does not make another post an urgent imperative. Segal is married and has two children, and has been commuting weekly from London to Gibraltar since June 2005.

On the business front, PartyGaming has revealed that it is interested in buying a sports betting company to add to its online gaming operations, Segal said. He said the company would only consider buying such a business outside the U.S. due to the confused legal situation pertaining there.

The proportion of PartyGaming's revenue coming from U.S. players dropped 5 percent to 84 percent in 2005, the company said. In January 2006, 39 percent of new poker players came from outside the U.S.

PartyGaming will offer its site in 15 different languages by the end of the year, Segal said. The company is introducing multilingual online offerings and a multicurrency payment system near the end of the year to attract more international gamblers to the site.