PartyGaming has trumped rivals once again as the internet poker giant reported a 65 per cent rise in revenues and a record number of new player sign-ups in the fourth quarter thanks in part to the addition of blackjack to its online casino.
But after an early rise, shares in the company fell 2.75 per cent by mid morning to 141½p as some investors feared further regulatory uncertainty in the US.
The world’s biggest online gambling site said on Friday that group revenues rose to $320.3m from $194m the year before and that 229,227 new players had signed up, of whom 32 per cent were outside the US which currently provides almost 85 per cent of customers.
Richard Segal, chief executive, added that as well as signing up new players, the company improved its yield per player by 8 per cent compared to the previous quarter as a result of a seasonal uplift and the addition of blackjack in October.
“The success of blackjack has transformed our casino business and proved very popular with a large number of our poker players. Our scale has again proved commercially important. Through effective cross-selling to our large customer base we are well on the way to creating the world’s largest online casino.”
Rival Empire Online said on Tuesday that it was seeing rapid growth in player numbers at its new proprietary sites, although with expected profits before exceptionals of £37m, this is far below expected returns from PartyGaming. Empire has taken legal action against its larger rival after PartyGaming separated its poker platform and moved its players to a new platform, leaving Empire players on an inferior system.
In Friday’s statement, PartyGaming said that the proceedings were likely to be protracted and that an amicable resolution to the dispute would be preferable. Martin Weigold, finance director, added that the group would make a provision for legal costs of between $1m and $2m against 2005 results.
Compared to the third quarter, net poker revenues at PartyGaming excluding contributions from “skins” such as Empire, that deliver players through their own portals, were up 17 per cent to $233.7m. The company said that the popularity of blackjack increased players’ total spending by 40 per cent even though it diluted revenues from poker. However, the increase was expected to decline to about 30 per cent over time as the novelty of the new game wore off.
However, in trading since the start of the year, the popularity of blackjack receded from the high levels immediately after launch with current average gross revenue of $800,000 per day. The company said that overall trading was strong and in line with expectations and that the company would fully integrate all of the games into one “shared purse” system at some point in the first half of the year.
Net casino revenues in the three months to the end of December rose significantly to $82.3m from $11m in the third quarter with an almost fifteen-fold increase to 2.4m in active player days, a measure which records the amount of time spent gambling by customers. However, stripping out the benefit from the addition of blackjack, core casino revenues actually fell between 10 and15 per cent.
Matthew Gerard at Investec Securities was bullish about the potential for PartyGaming, as a result of “the likely future catalysts of the shared purse and new product launches.”
Full year results are expected on February 28.
Separately, Ukbetting, an online sports and gaming firm said that it planned to issue new shares at 60p each to raise up to £11.5m ($20.5m) in order to fund new advertising methods, video streaming and to allow for the provision of multi-lingual content.
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