Sportingbet posts full-year loss after U.S. online gaming ban

LONDON: Online gambling company Sportingbet PLC, forced to quit the U.S. after lawmakers effectively made its business illegal, reported an annual loss Wednesday but said its other operations were doing well and it expected to grow in Europe.

Sportingbet reported a loss of 312.9 million pounds (US$637.5 million, €449.5 million) for the year ending July 31. In the year-earlier period, it posted a profit of 69.2 million pounds.

Revenue fell 36 percent to 1.32 billion pounds (€1.9 billion; US$2.69 billion) from 2.06 billion pounds.

But the company, which lost over 75 percent of its business when U.S. legislators outlawed credit card-based online gambling in October 2006, said it was pleased with results from its continuing operations.

Turnover from its remaining operations was up 23.3 percent at 1.1 billion pounds (US$2.2 billion, €1.56 billion) compared with 890 million pounds for the same period last year.

"Given the enormity of the change and restructuring that has taken place at Sportingbet, I am pleased to report a strong increase in gross win in the continuing business and especially pleased with the growth in our core European sports betting business of 48 percent," Chief Executive Andrew McIver said in a statement.

Sportingbet shares fell 0.3 percent to 48.25 pence (98 U.S. cents, 69 euro cents) on the London Stock Exchange.

Sportingbet, like many of its rivals, pulled out of the U.S. and sold its operations on the cheap, after the U.S. outlawed the industry. Sportingbet sold its U.S. operations, comprising its U.S.-facing sports-betting and casino business and its U.S. poker operations, to Antigua-based Jazette Enterprises Ltd. in October, offloading $13.2 million of debt in the process.

Its operations now consist of its European sports, casino and poker business, an Australian sports business and the non-U.S. business of Paradise Poker.

Sportingbet said it expected further growth in Europe as governments there continue to liberalize online gambling legislation. In Europe, sports turnover rose 7 percent in August from the same period last year and saw a 23 percent increase in September, the company said.

Its poker business has shown "signs of growth following the seasonal summer slowdown," the company said, and added that in the key market of Australia the business did well despite an outbreak of horse flu, which led to a number of race meeting cancellations.

International Herald Tribune

News Added: 17 October, 2007

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