Party Gaming Half Year Profits Soar
Published: Thursday, September 07, 2006 Online-Casinos.com
PARTY GAMING HALF YEAR PROFITS SOAR
47 percent increase in profits...and less reliance on US business
Online gaming group PartyGaming reported a 47 percent increase in its first-half profit this week and revealed that recent acquisition, Gamebookers was exceeding expectations.
Reuters reported that Party Gaming Chief Executive Mitch Garber said the main focus was expanding internationally to reduce the group's dependence on the risky U.S. market, where some politicians are trying to ban online gaming. "The most fundamental part of our strategy is to develop our non-U.S. business," he told reporters.
"Efforts to drive our existing business include ... the development of strategic partnerships that provide access to new geographic markets," he added. "I hope to be able to say more on this over the coming months."
Revenues from outside America had increased 151 percent as the group continued to reduce its dependence on the US gambling market.
The owner of the PartyPoker and PartyCasino Web sites said first-half underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose to $380 million (GBP 202 million) from $257.7 million a year earlier.
Garber also told reporters that Europe-focused sports betting business Gamebookers, which PartyGaming bought for Euro 102 million ($131 million) last month, was doing better than expected. "It's everything I'd thought it would be and more," he said, adding that cross-selling of Internet gaming between Gamebookers and other Party-branded sites had not even started yet.
"On a standalone basis, without cross-promoting, it's over-performing," he said.
PartyGaming has never taken sports bets from the United States, but is still trying to reduce its overall exposure. It whittled down the percentage of revenues it takes from the United States to 77 percent in the first half, from 86 percent a year earlier.
Garber said PartyGaming was not bidding for sports betting rival Victor Chandler and was unlikely to enter a bidding war for World Gaming plc, which rival Sportingbet said earlier (see Online-Casinos.com/InfoPowa bulletins) it was considering buying. "I'm always reluctant to get into a bidding war," said Garber when asked whether he would consider a counterbid.
When asked whether he was bidding for Victor Chandler, which bankers say could fetch 300 million to 400 million pounds ($565 million-$750 million), he said: "No. Definitely not."
PartyGaming said its new player sign-ups had returned to levels seen in the first quarter with over 3 000 new additions per day.
The company, which is listed in the FTSE 100 Index, saw first-half revenues to June 30 rise by 51 percent to hit $661.9 million (Euro 517 million) compared to $437.4m (Euro 341 million) last year. But it highlighted a boost in turnover away from the United States which lifted to $149.8 million (Euro 117 million) from $59.8 million (Euro 46.7 million) in 2005.
Net poker revenues were up by 22 percent year on year to $502.7 million, while profits from the poker business rose by 12 percent to $274.3 million.
Summarising the performance, Garber said: “These results demonstrate the strength of our business model and also the potential to grow business through investment and the development of new products and new territories outside North America.” He said that 23 percent of group total revenue was generated outside the US in the first half of 2006, compared with 14 percent a year ago.
Besides PartyPoker.com, PartyGaming also operates PartyCasino.com, the world's largest online casino, PartyGammon.com, as well as Gamebookers.com, an exclusively non-US venture, and PartyBingo.com. Other online gaming sites within the PartyGaming empire include EmpirePoker.com, StarluckCasino.com and PlanetLuckCasino.com.
