Last week brought word that the internet gambling giant Party Gaming had seen its Q1 revenues grow 27% year-over-year to $127.1 million. However, average daily revenue slid 2% from the previous quarter due to strong casino performance in Q4 2009 and foreign exchange setbacks.
Party Gaming’s online poker room, PartyPoker, took a tumble. Revenues of $47.8 million in the first quarter of 2010 were 11% lower than the $53.6 million recorded in Q1 2009. The statement to investors added, “Average daily poker revenue [was] in line with the previous quarter on the back of higher player numbers offset by adverse FX movements.” Even with the lower revenue figures, PartyPoker reported that its Italian market share had passed 3%.
Despite not accepting players from the United States, PartyPoker still competes against sites like Full Tilt Poker and PokerStars throughout Europe. Full Tilt boasts a land-based Spanish poker series, while PokerStars European Poker Tour (EPT) events roam the continent. PartyPoker officials explained the impact its competition had on the company’s first quarter bottom line: “Player yields in poker declined year-over-year due to increased competition, particularly from U.S. sites, prompting an increase in bonus rates that returned to 25% of gross revenue.”
Party Gaming’s casino revenue ballooned 25% in the first quarter of 2010 year-over-year to $51.2 million, although average daily revenue was down 9% versus the previous quarter. During Q1 2009, Party Gaming’s Bingo revenues were a lowly $1.0 million. One year later, that number jumped to $17.7 million. In the second half of 2009, Party Gaming acquired Cashcade, bolstering its Bingo presence. Finally, in the world of sports betting, revenues shot up 58% to $7.1 million. Average daily revenue from sports betting climbed 55% to $78,400.
In its revenue release, Party Gaming officials also revealed that the Aviation Club de France would be brought onboard the company’s French poker network: ”In a separate announcement made today, we are delighted to announce details of a further B2B deal in France with the addition of Aviation Club de France that will join our French poker network, which we plan to launch as soon as the new regulations allow.” The storied Aviation Club, which sits on the Champs-Elysées in Paris, is in the midst of hosting Day 1 of the World Poker Tour’s (WPT) Grand Prix de Paris.
Last November, stockholders of Party Gaming approved a $12.3 million purchase of the WPT, shunning a last-minute $36.5 million offer by Mandalay Media. Coupled with the inking of a non-prosecution agreement with the U.S. Department of Justice, Party Gaming appears poised to re-enter the U.S. market in strong fashion should internet gambling be legalized. In the meantime, the industry is bracing for the June 1st financial services industry compliance deadline with the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA).
Party Gaming is traded on the London Stock Exchange under the symbol “PRTY.” It closed Friday’s trading at 258.00 pence, down 16.00 pence on the day, or nearly 6%. On March 12th, the company’s stock had climbed as high as 334.5 pence before undergoing a severe correction along with the rest of the market. Worldwide stock exchanges were hit hard last week after concerns about Greece’s debt mounted. On Thursday, the Dow Jones Industrial Average, which is housed in New York City, fell over 1,000 points at one point, or nearly 10%, before rebounding.
Party Gaming plans to stop accepting casino and Bingo action from France, which accounted for $3.1 million of its Q1 2010 revenue. The company has cash on hand of $228.3 million and is due $24.0 million from payment processors.
PartyPoker’s team of sponsored pros includes Poker Hall of Fame member Mike Sexton, “High Stakes Poker” hostess Kara Scott, and self-proclaimed bad boy Tony G.
