PartyGaming's stock saw a minor boost yesterday when the company released its interim report for 2007. The bump wasn't a result of how much the company has made so far in 2007 - earnings were as low expected - but because of a record number of new real money member signups from people who don't live in the U.S.
In the first six months of 2007, 403,713 real money players who don't live in the U.S. signed up. In the same period last year, 220,761 signed up. PartyGaming left the U.S. market in October of last year after Congress passed the Unlawful Internet Gambling Enforcement Act (UIGEA), so all the new real money members now come from outside the U.S.
After PartyGaming left the U.S., its stock plunged from 107 pence to 45, and it would eventually hit an all-time low of below 23 pence on Aug. 28, the day before the report was released. The company floated its stock in the summer of 2005 and it peaked at 173.50 pence in August of that year.
The report showed that the UIGEA took a huge chunk out of PartyGaming's bottom line in the nine months it operated without doing business with U.S. customers. The company reported that its earnings before tax, depreciation, and amortization were $36.9 million the first half of 2007. That same figure from the same period in 2006 was $360 million.
The company did report that revenue from players outside the U.S. - which is its entire community now - increased 42 percent as compared to last year. PartyGaming now has a multilingual customer service center manned by 56 employees in Europe, and its software allows people who speak any of 13 languages to play, in order to accommodate its global customer base.
The company also reiterated its ongoing pursuit of relationships with companies and groups around the world. It specifically noted a three-year deal that it entered with 70 U.K. soccer clubs that will send its members to PartyGaming's gambling sites. The adult members of these sites account for 2.5 million people.
The report also told its investors that PartyGaming continues to voluntarily talk with the United States Attorney's Office for the Southern District of New York. PartyGaming is responding questions the government agency has, and says it's too early to tell where the discussions are leading or what they mean to the company.
PartyGaming's stock closed at 27.75 pence today.
