Pre-US Ban Results Great At Sportingbet
Published: Thursday, October 19, 2006 Online-Casinos.com
PRE-U.S.BAN RESULTS GREAT AT SPORTINGBET
But one man's "blind political ambition" will be expensive at an estimated GBP 210 million
Sportingbet has warned investors that the fall-out caused by the United States outlawing of online gambling financial transactions will cost the company GBP 210 million in the year to July 2007.
The figure was revealed as the company unveiled its full-year results for 2006 - the first company to report since the Unlawful Internet Gambling Enforcement Act was signed into law by the US president last week. The UK company sold its US operations for GBP 1 to its US sports betting and casino business Sportsbook.com last week (see previous Online-Casinos.com/InfoPowa reports).
"(They are a) great set of results but clearly relating to a year when things were very different," newly appointed Chief Executive Officer Andrew McIver said.
McIver, who stepped up today from finance director to chief executive of the London listed group, blasted the legislation and its architect Senator Bill Frist. "I am very saddened by the events in the States, especially as it was driven by one man's blind political ambition," he said.
The company reported a 75 percent leap in pre-tax profits from GBP 40.8 million to GBP 71.5 million in the year to the end of July, on turnover up 35 percent to GBP 2.06 billion. The Americas, including the United States, accounted for just over half Sportingbet's turnover of GBP 2.06 billion.
McIver insisted that Europe and Australia could eventually make up the lost business following an increased marketing focus in those regions of the world. The companies sports bets in Europe were up 62 percent year-on-year in the first 10 weeks of its new financial year.
McIver said following its retreat from the United States, Sportingbet was back to the position it was in a couple of years ago but "the difference being we have got a lot more cash ... we know a lot more about how to do things and the software is a lot better than it was."
The "much more liberal environment" in Europe meant there was little chance of a European Union ban on Internet gambling, particularly with Britain and Ireland happy with Internet gambling as an industry, McIver said.
The online gambling market is just 2 percent or 3 percent of the total gambling market in Europe, and is forecast to grow up to 10 percent by 2010 said McIver, claiming that there was plenty of room for all the competition.
The hefty exceptional costs this year derive mostly from a goodwill write-down. There will be around GBP 10 million in reorganisation costs, though McIver pledged to keep on as many of the 350 employees as possible.
Sportingbet was one of the public companies hardest hit by the US crackdown especially after its then chairman Peter Dicks was arrested in New York in September.
Asked whether the Act in the US ended any uncertainty and if he felt safe travelling again, McIver said: "I don't see myself as 100 percent safe to travel to the States. I don't think we have a problem at a Federal level. I think I'll have a problem at the Peter Dicks state level."
The company has axed its dividend.
