PartyPoker Profit Down 47 Percent in 2009

PartyGaming, the publicly-quoted parent company of PartyPoker, today issued its full-year financial results for 2009. Continuing profit before tax slumped 47 percent to $38.7 milllion from $73.1 milion in 2008.

Gross poker revenue fell 23 percent to $250.9 million from $327.6 percent in 2008 while net poker revenue in the same period declined 28 percent to $196.7 million from $274 million a year earlier.

Players benefited from a more generous bonus system with bonuses as a percentage of revenue rising to 21.6 percent to 16.4 percent.

Casino and bingo both outperformed poker with gross revenue from the former up 11 percent to $267.1 million and the latter up 891 percent to $76.3 million.

Sports betting also performed well with PartyBets net sports betting revenue gross revenue rising 6 percent to $19 million in 2009 as the gross win margin expanded to 5.5 percent from 4.7 percent in 2008.

Poker’s key perfomance indicators generally showed a reversal of recent declines with the yield per active player days rising to $10.3 in the fourth quarter of 2009 from $9.7 in the third quarter. Real money sign ups increase to 125,700 from 120,100 in the same period, and unique active players grew to 438,400 from 435,500 between Q3 and Q4, 2009.

Poker generated 44.2 percent of PartyGaming revenues in 2009 compared to 57.9 percent in 2008.

In its statement the company said, “While gross poker revenues declined by 23% versus the prior year, it was the impact of a strong US dollar coupled with a consumer downturn and severe competitive pressures in the first half that was the key drag on gross revenue performance in 2009. Gross revenue in the second half was broadly flat compared with the previous half following a conscious decision to recover some lost ground in player numbers and become more competitive through an increase in bonus rates.

“These rates increased from under 20% of gross revenue in the first half to 24% in the second half of 2009. Whilst player numbers and overall activity levels increased in the second half, this was at the expense of net revenue that fell by approximately 8% versus the first half of 2009.”

In relation to its takeover of the World Poker Tour brand in 2009 the company said, “The Group plans to leverage the strong WPT brand and land-based tournament franchise, to promote the Group’s leading position in the global online poker market and to position the Group for a possible re- entry to the US, should an appropriate licensing regime be introduced.”

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