Party Gaming Releases Casino Report

Casino operations show good results

A pre-closing trading report was issued by the industry giant Party Gaming plc, showing good results in the casino operations, and somewhat lower performance in poker and bingo activities.

It is assessed that expectations will be met by clean EBITDA margins for 2010, around between 27 and 28 percent, with the prospect of regulation in new markets offering 'exciting' medium to long-term revenue potential that could be accessed by additional investment.

It was stated that "Trading since the end of September 2010 has been solid overall with a particularly strong performance in casino that has enjoyed double-digit growth in average daily gross revenue versus the third quarter, driven by growth in both turnover and hold.”

"Poker has also seen growth in average daily gross revenue over the third quarter, although the usual seasonal pickup has been less pronounced than in previous years due to the strengthening of the Euro against the US dollar.

"In bingo, average gross daily revenue has grown versus the current trading data reported at the time of our Q3 KPIs, but remains lower than the third quarter. This is due to the strengthening of the Euro against sterling and seasonality, as UK-based bingo players typically reduce their spend in the run-up to Christmas.

"While sports betting has continued to deliver a solid performance in the period, the benefit of the World Cup during the third quarter as well as a favourable series of results for punters has meant that average daily gross revenue in sports is down versus the third quarter.”

It was also underlined that online gaming regulatory framework is now the subject of interest in a number of territories, causing the company’s attention to turn to Germany, Greece, Holland, Denmark and Spain as well as other countries in Europe. However, if any of these countries decide to regulate their markets, additional gaming taxes and investment may be required, it was stated.

Apart from this, there’s been a lot of action in the US regarding regulation of online gaming both at the federal and state level, so it’s important to note that Party Gaming is already strongly positioned to take advantage of any breakthroughs, having engaged with several licensed companies.

Another big move for the company – the merger with Austrian giant Bwin is to be continued, and in this regards, they will hold an extraordinary general meeting of shareholders in late January 2011 and the deal is expected to be finalized around March 2011.

According to the company CEO Jim Ryan, “Revenues in the fourth quarter have enjoyed their usual seasonal upturn. Casino has performed particularly strongly with double-digit revenue growth over the third quarter, although currency movements meant that the uplift in poker has been less pronounced than usual. Clean EBITDA margins are expected to be in line with our previous guidance for 2010.

“The proposed merger with bwin remains on-track to complete at the end of the first quarter and should place the combined group in a strong position to take advantage of the changing regulatory landscape in Europe given its leadership positions across all key product verticals.”

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