Global Approach To Diversify & Cut Costs

Published: Thursday, October 19, 2006 Online-Casinos.com

GLOBAL APPROACH TO DIVERSIFY AND CUT COSTS

More details available on Australian online gambling group's plans

The Australian-owned Global Approach online gambling group has expanded on its earlier reaction (see previous Online-Casinos.com/InfoPowa report) to the U.S. Unlawful Internet Gambling Enforcement Act, giving details of the measures it is taking to diversify and cut costs.

The update emphasises a renewed focus on Asian and European markets together with a major corporate restructure.

Managing Director James Canning-Ure said, "Revenues from US players for our combined casino and poker business amount to around 50 percent of net gaming revenues. We plan to offset any potential revenue loss by continuing our expansion into the European and Asian markets."

Canning-Ure revealed that the company was in merger and acquisition talks with a number of potential partners, which would offer backroom savings and synergies, to maximise shareholder value through curtailing costs. "Directors and senior management are also taking sizeable salary cuts as we move to slash up to $ 1.5 million of expenses from the business. All operations are currently under review as result of the change to our operating condition," he said.

Earlier this year Global launched the Japanese-language site Ibigcasino.com for the Japanese market, as the company ramps up its marketing efforts in the world's second-biggest economy. "Japan shows enormous potential as the Japanese already gamble over $40 billion a year in public lotteries and racing, with another $300 billion from pinball-style pachinko parlours," Canning-Ure said.

"Global's casino site is one of a few catering for Japanese punters, and with our call centre of Japanese-speaking staff in Brisbane - a city with only a one hour time difference from Japan - we're well placed to capitalise on this demand."

In the United Kingdom, Global recently re-launched its UK-focused casino brand UK Casino Club Review. The company is currently in the process of implementing a number of strategies targeting Europe, including translating its casinos into a number of European languages to meet client demand.

Consequently, the previous projection of $2.1 million net profit after tax for the 2007 financial year is unlikely to be achieved. However it is premature to provide an updated forecast at this time until the full effect of the US situation and the proposed cost savings are realised.