888 Poker Grows As It Eyes Up U.S. Market888 Annual Report Shows Poker Revenue Up 44 Percent As Regulated Market Landscape Improves |
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888 today confirmed its 2012 poker revenue was up 44 percent to $87.5 million from $60.6 million.
The company gave an overview of its current poker landscape in its annual financial report noting the positive changes that had occurred in Spain, the USA and, potentially, Australia.
“Our Poker business continues to grow, with record breaking revenues of US$88 million and a 31% increase in active players compared to last year,” it said. “We remain in the top 5 in terms of global liquidity, as reported by PokerScout. This product group is our star performer and we deservedly won the highly regarded eGaming Review Poker Operator of the Year award in November.
“During the year we have made significant progress in newly regulated markets. In the summer we saw the opening of the Spanish market, albeit three months later than was planned given the delayed introduction of the new regime. We had adapted our software well in advance of licensing, and following the retroactive duty payment we were granted our license on 1 June.
“After effectively and efficiently migrating customers to the regulated environment we quickly built market share, with our poker offer becoming number two in the Spanish market with 888poker.es delivering more than 20% market share. This was achieved by calculated marketing investment, and further shows the strength of our management capabilities in understanding new markets, underpinned by the efficiency of our customer acquisition strategy.
“Proving just what an opportunity regulation can provide for 888, the end result is that poker revenue generated since regulation is more than double that pre-regulation, even with the deduction of gaming duty. We are encouraged by this market, and we will invest in order to grow this significant business.
“We currently operate Caesars Interactive Entertainment’s (CIE) World Series of Poker online poker brand in the UK, a collaboration which received the approval of the Nevada Gaming Control Board and included a finding by the Control Board of suitability for 888. In January 2012 we announced a deal extending our relationship with Caesars that will see Dragonfish power a selection of CIE’s established and recognised poker brands including the “WSOP” in the US, once online gaming is permitted under the new regulatory regime.
“In July we announced an alliance with WMS Gaming Inc., which is one of the world’s largest slot and games design operators with in excess of 250 secondary and tertiary casino customers. As one of the biggest suppliers of slot machines to hundreds of land based casinos in the US, this deal will enable WMS to offer an online product to all its customers utilising our state of the art poker platform.
“After effectively and efficiently migrating customers to the regulated environment we quickly built market share, with our poker offer becoming number two in the Spanish market with more than 20% market share for 888poker.es. This was done without significant marketing investment, showing the efficiency of our customer acquisition. Revenue from poker in Spain is now double that earned from the pre-regulation market.
“Federal legislation governing online gaming (most likely online poker, initially) remains the less likely possibility in 2013. Late 2012 saw consensus between Senator Harry Reid (long time supporter of online poker legislation) and Senator Jon Kyl (who has traditionally objected to federal legislation condoning online poker) who together proposed a draft bill to regulate online poker on a federal level. However, the year ended without the bill having been formally introduced to Congress.
“It is yet to be seen whether Senator Kyl’s retirement from the US Senate in early 2013 will affect the likelihood of a new federal online poker bill, and whether the newly elected US administration will pursue initiatives aimed at regulating online gaming on the federal level. As noted below, various US states have embarked on independent initiatives to regulate online gaming within their territories, and the possibility of inter-state compacts is not to be ruled out. The Group remains hopeful that these developments at state level will ultimately encourage federal legislation aimed at regulation of the industry on a national level.
“In Australia, a proposal was published in late 2012 recommending that the government embark on a 5-year online poker “trial”. Resistance within the Australian Parliament remains vocal, and the likelihood of significant change prior to national elections late in 2013 seems unlikely.”
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