Poker sales stall at PartyGaming

A new customer loyalty scheme hit poker sales at PartyGaming, but this was mitigated by a strong showing from the online gambling company's growing casino business.

In the last three months of 2007, sales rose 52 per cent to $120m (£60m) compared with the same quarter in the previous year.

Revenue from poker, accounting for about two-thirds of overall sales, was 23 per cent higher than the same quarter in 2006. However, it was 3 per cent lower than the previous quarter, ending in September 2007.

Mitch Garber, chief executive, said the switch in loyalty schemes was needed because the previous regime was "rewarding customers for disloyalty".

Unique active poker player numbers rose 13 per cent on the previous quarter, but the loyalty scheme restructuring caused yield per active player to fall 9 per cent because of an increase in bonus pay-outs. PartyPoker's share of the market is estimated by a leading poker monitoring website to be about 10 per cent.

It lost some poker market share from websites that still take bets from the US. PartyGaming withdrew from the lucrative US market in October 2006 following tightened legislation against online gambling. This resulted in the loss of three-quarters of its US-based customers and a plunge in its share price. Other companies in the sector were hit by similar difficulties.

Casino is one of the areas PartyGaming has developed to rebuild the company in new European markets. Casino sign-ups have doubled compared with last year and are up 9 per cent quarter-on-quarter.

Casino sales rose 15 per cent on the previous quarter and 156 per cent on the same quarter last year, to £42.3m, while the fledgling sports betting business grew 50 per cent year-on-year to $5.1m.

In all, new player sign-ups were 16 per cent higher than the previous quarter, and active player days were up 11 per cent on the previous quarter and 30 per cent on last year to 7.3m.

Mr Garber said he had held talks with French authorities last week about the tax structure and framework for a possible regulated online gambling market.

The French government, which faces pressure from the European Commission to repeal laws banning online gambling, has been "open and fair-minded", he said.

Trading in the past four weeks was in line with expectations. The shares fell 2½p to 26p.

News Added: 31 January, 2008

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