Bwin.party Poker Revenue Falls in 2011

Bwin.party Digital Entertainment today issued its full year results for 2011 with poker delivering a mixed performance.

Gross revenue (pro forma, as if the March 2011 merger of bwin and Party Gaming had always been in place) was down 10 percent to €263.8 million from €294.1 million in 2010.

Net revenue fell seven percent to €209.7 million from €226.3 million a year earlier while earnings before interest, tax, depreciation and amortization rose eight percent to €29.4 million from €27.7 million in 2010.

Poker made up 25.7 percent of bwin.party’s overall revenue in 2011 from 27.8 percent in 2010.

The company addressed many poker-related issues in its annual report. Of particular interest was its take on the competitive landscape in poker. “The indictment of the founders of PokerStars, Full Tilt Poker and Absolute Poker/Ultimate Bet on 15 April 2011 represented the start of what we believe will prove to be a fundamental shift in the shape and structure of the global online poker market,” the company said.

“With the exception of PokerStars, all of these sites have now closed. PokerStars’ relative size meant that it was able to capture the lion’s share of Full Tilt’s non-US players, consolidating its position as market leader in most territories.

“This makes for a challenging operating environment for our poker business but we believe that we can remain one of the largest networks in each market. Our position should be further enhanced when we pool our player liquidity across our poker brands in the dotcom as well as the ring-fenced markets in Italy and France later this year.

“Separately, the past 18 months have seen the emergence of a new gaming phenomenon on the internet: social gaming. Zynga, Playdom, Playfish and other social gaming platforms have all experienced spectacular growth with their virtual currency and virtual goods-driven business models that have attracted millions of customers across the globe.

“Zynga’s CEO, Mark Pincus was quoted recently saying that online gambling is a “natural fit” with virtual goods and social games.

“We believe it is only a matter of time before the worlds of real money gaming and social gaming converge. This represents a major opportunity for bwin.party and we have a number of initiatives already underway in this area that we expect to drive value for shareholders in the medium to long-term.

bwin.party is currently developing a social poker community on the Google+ platform known as Aces Hangout.

Overall bwin.party, which also operates sportsbook, bingo, and casino businesses, saw total revenue grow 0.2 percent to €816 million while clean earnings before interest, tax, depreciation and amortisation was up 3.2 percent to €199.3 million.

The company recent applied for a gaming license in Nevada.

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