Despite the shutting down of the US market to online gambling firms last year,
Gibraltar-based PartyGaming Plc has announced strong growth in revenues and
profits, as its decision to focus on other markets begins to pay off.
In its preliminary results for the year ended December 31, 2006, the company
announced that continuing revenue was up 112% to $325 million compared with
2005, reflecting strong growth in Europe, the Middle East and Africa. Total
revenues were up 13% to just over $1.1 billion, while pre-tax profits were up
158% to $50.9 million.
Trading patterns since the year end have seen continued recovery in poker and
casino revenue, in line with the Board’s expectations. Gross revenue per
day in the 4 weeks to 25 February 2007 has averaged $1.3 million.
“We are pleased to be announcing full year results that confirm the strength
of the Group’s business model," stated Mitch Garber, PartyGaming CEO.
"Whilst the decision to stop accepting customers from the US was a bitter
blow for our business, our continuing operations have grown strongly from the
lows reached in November 2006, benefiting from the rapid reorganisation of our
business and the acceleration of our efforts in international territories. The
addition of multi-lingual and multi-currency versions of our games should further
increase their market potential. While regulatory uncertainty continues in some
territories, our continuing operations are in excellent shape and we have made
a solid start to 2007," he observed.
The enactment in the United States of the Unlawful Internet Gambling Enforcement
Act (UIGEA) resulted in the immediate shut-down of all real money games to customers
in the US last year, fundamentally changing the shape of the business, and forcing
PartyGaming to restructure the company at a cost of $250 million. This has resulted in
the company shedding about 800 jobs in India on the one hand, and targeting
new acquisitions of non-US facing online gambling firms on the other.
"It was necessary to reduce the cost base as a result of illogical, ill-conceived
and inconsistent prohibition legislation in the United States," PartyGaming
spokesman John Shepherd stated last year.
PartyGaming has announced that it will acquire the assets, players
and gaming related contracts associated with Empire Online's (EOL) gaming business,
and all of Intercontinental Online Gaming's business and assets, as the company
attempts to strengthen its non-US customer base. Online gaming websites operated
by EOL and Intercontinental that are being acquired by PartyGaming include:
NoblePoker.com, Clubdicecasino.com, EnterCasino.com, MissBingo.com, FairPoker.com,
and MagicBoxCasino.com. Subject to completion, a software licensing agreement
will also be entered into with Playtech, which is one of the world’s leading
companies in its field, and hosts the sites being acquired from EOL and Intercontinental.
PartyGaming has also expressed an interest in purchasing a part of Austrian
Internet betting company bwin.com.
INVESTORSOFFSHORE.COM
