Poker Revenue Falls but PartyGaming Remains Upbeat

With PartyGaming in various headlines recently for its new deal with World Poker Tour Enterprises, and most recently its announcement of World Open V online qualification, it is back in the limelight once again with its half-year financial results for the six months ending Jun. 30, 2009.

The first result which appears quite strikingly is its net revenue for poker. Standing last year at $153.9 million, it has now dropped to $102.6 million. Clean EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) for poker for the half-year 2009 is $25.7 million, but last year it was $36 million, meaning a loss of more than $10 million.

Chief Executive Officer of PartyGaming, Jim Ryan’s comments on this were, “While poker continues to face competitive challenges from the US-facing sites, the launch of our Italian poker network and a much improved loyalty programme and retention process has seen poker numbers stabilising in the second quarter with unique active players 5% ahead of the first quarter, despite the second quarter being a seasonally quiet period.”

Making up for poker is its casino results, with second quarter average daily revenue up 17 percent on the first quarter. Ryan calls the company’s casino product “our star performer” and with 60 new games added during the period, expects these figures only to improve.

The total net revenue for the half-year 2008 was $254.8 million, whereas in 2009 it has decreased to $201.3 million. The company says that this is in-line with market expectations and reflects economic conditions, currency movements, consumer slowdown, and in regards to poker — outside competition.

This figure was also impacted by the settlement the company reached with the U.S. government of $101 million in fines, with the assurance that the state will not prosecute the company or any of its subsidiaries for providing Internet gambling services to American customers prior to the Unlawful Internet Gambling Enforcement Act.

This resulted in loss after tax of $66.9 million, however, the company perhaps sees it as a good future investment. Ryan says, “With many of our competitors still to resolve their legacy issues with the US authorities, we have sought to take advantage of the window of opportunity that now exists to consolidate the market at sensible prices.”

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