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Industry News

by Brendan Murray |  Published: Jan 01, 2011

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Leisure & Gaming Sells Profitable Poker Business
Publicly quoted online gaming group Leisure & Gaming has been forced into administration with its main asset, Italy’s Betshop Group (BSG), sold for a cut-price £1 million to Honeymead Services.
Betshop Poker had been a jewel in the company’s crown with around 13,500 regular players and gross online poker rake of €6.6 million.
The company’s shares were suspended in May and the move into administration comes after the proposed £5 million sale of Betshop to Spain’s Grupo Perfaco fell through.
A statement from the administrators said, “The short timescale to disposal was dictated by the group’s critical cash position that required an injection of circa €3m, which included €1.5m as working capital into BSG, €0.5m into the Company to deal with immediate creditors and €1m to the bank who had issued demand for repayment. €450k of sports betting losses were incurred in the week ending 17 October 2010, further compounding the cash position in BSG.”
Betsson Poker Revenue
Continues to Slide
Online poker revenue at Nordic gaming operator Betsson continues to fall with third quarter 2010 income down 11 percent to SEK24.4 million (€2.63 million) compared to SEK27.5 million (€2.96 million) in the same period of 2009.
Year-on-year, poker revenue has now declined for at least seven consecutive quarters.
Quarter-on-quarter poker revenue dropped four percent from the second quarter of 2010. This drop was less pronounced than the 17 percent decline between the first and second quarters of this year.
Online poker now makes up just 8.1 percent of gross profit at the site, down from 10.1 percent in the third quarter of 2009, and saw a significant 25 percent decline in Norway.
Betsson’s primary revenue generator is casino, which represents 57.7 percent of gross profit (down from 68.5 percent a year earlier). This is followed by sportsbook, which makes up 29.7 percent (up from 16.4 percent a year earlier).
PartyGaming’s Poker Revenue Drops While bwin’s Soars
In its third quarter financial statement, PartyGaming reported nine percent growth in all products except poker in the three months to September 30, 2010.
Poker revenue was down five percent from €31.3 million in the third quarter of 2009 to €29.6 million in the same period of 2010, while daily average players fell from 50,400 to 46,100. However yield per active player day was up by three percent to seven percent in the third quarter of 2010 from 6.8 percent a year earlier.
The statement highlighted that although the dot.com poker market remained a challenge due to competition from U.S.-facing sites, the company’s performance in France differed with average daily players on the increase every month since its launch.
Jim Ryan, chief executive officer, said, “We have been encouraged by the strong start from our nascent French poker network that went live on 1 July 2010. A strong performance by PartyPoker in France has been further boosted by the launch of PMU’s poker business in France as well as services for AB Groupe and Aviation Club de France.
“I am also pleased to report that the proposed merger with bwin remains on track to complete at the end of Q1 2011, subject to regulatory and shareholder approvals and I am delighted that Simon Duffy has agreed to become Chairman of the Enlarged Group on completion, as detailed in a separate press release issued today.”
Elsewhere bwin released preliminary figures for the first nine months of 2010, which painted a different picture for poker. bwin’s poker gross gaming revenues were up 28 percent to €103.9 million from €81.1 million for the same period of 2009.
Poker revenue was also reported to be up 43.5 percent to €33.2 million in the third quarter of 2010 from €23.1 million a year earlier due to the acquisition of Gioco Digitale, the successful market launch in France, and the addition of Betfair to the Ongame poker network (a 100 percent-owned subsidiary of bwin).
Excluding Gioco Digitale, poker still grew at bwin by 5.3 percent.
Potraiser.com Joins Cake
Network
Online poker site, Potraiser has joined the Cake poker network.
Potraiser poker manager, Albert Rolander, said, “It’s really exciting that we can join a network that has such a promising future and is expanding in interesting markets such as Asia and South America.”
Chief executive officer of Potraiser, Fredrik Rahnasto, said, “The main reason for us to change networks is the apparent advantages we see by joining the Cake Network. We have been offered a look into the future by Cake and the environment we see is very fair and promising, both regarding the play and software updates.”
EU Must Make Online Gambling ‘Legitimate’ Says MEP
The third Responsible Gaming Day took place at the European Parliament in October and the audience heard from gaming industry bosses and EU legislators.
MEP Timothy Kirkhope, who hosted the event, said, “This is a golden opportunity to begin to set in place a level playing field for a sector which is struggling with a patchwork of different rules. I have great faith in Commissioner Barnier that he will take heed of our discussions today, and begin to work out a strategy to ensure that online gambling can become a legitimate part of the internal market.”
Co-ceo of bwin, Norbert Teufelberger, told delegates, “With almost 2/3 of EU member states already working on or at least considering a reform of their gaming markets, there is a unique momentum now to ensure that regulation delivers for consumers, the industry and Europe.
“Regulation must be harmonised so that consumers receive similar high protection regardless of where they play. Online gaming is a cross-border activity and consumer protection needs to be applied cross-border as well.”
Ladbrokes Poker Revenue Down
27 Percent
October’s interim management statement from Ladbrokes Plc, the UK’s largest bookmaker, indicated a continuing and significant decline in online poker revenue.
The company, which operates Ladbrokes Poker, said, “Poker continues to be impacted by the industry-wide issues regarding liquidity in Europe compared to US facing sites and net revenue was down 27% over the prior period.”
The news follows on from poor first-half figures which showed net revenue at Ladbrokes Poker fall 15.7 percent in the first half of 2010 to £10.7 million from £12.7 million in the first six months of 2009.
Estonia Gets Legal Online Poker With PokerStars.ee Launch
PokerStars has been granted an operational license in Estonia, and its new site, PokerStars.ee, is now live for Estonian players.
The company, which also operates in the fully regulated and licensed EU states of France and Italy, received an activity license in the Baltic state in August this year.
PokerStars director of marketing for the region, Michael Holmberg, said, “There are thousands of good poker players in Estonia and I am very glad that the license enables them to continue competing at the largest poker site with players all over the world.
“PokerStars has been the most popular poker room among Estonian players for several years, and with the licensing system now put in place in Estonia, I am convinced the country shows the way for many other EU nations in terms of regulation.”
Paradise Poker Revenue
Sees Small Decline in 2010
Sportingbet Plc has delivered solid figures for revenue generated from Paradise Poker to year-end July 31, 2010.
Compared to many of its competitors, Paradise Poker registered just a small decline in gross gaming revenue of just 1.4 percent to £21.7 million in the 12 months to end-July 2010 compared to £22 million in the same period a year earlier.
The company said in its year-end report that, “Poker continues to suffer as part of a global trend where huge liquidity advantages are realised by some of our competitors who are prepared to accept US resident players. We believe this is a relatively good performance and was down to several factors: localising the poker product, improving our Paradise poker tour and working with the IPN network to improve the acquisition and retention of players.”
After promotional bonuses of £4.3 million were deducted the company earned net revenue of £17.4 million, down from the £18.8 million earned a year earlier.
Poker makes up 10 percent of total gross gaming revenue at Sportingbet.
Earlier this year the company settled with the U.S. Department of Justice for $33 million arising from its online gambling activity in the U.S. between 1998 and 2006.