PartyGaming, owner and operator of PartyPoker, announced its 2010 half-year performance results on Friday. The Gibraltar-based company, which recently reached an agreement to merge with Bwin, posted an overall profit of €19.7 million despite a drop of 9.6% in poker revenue.
PartyPoker was the world’s largest online poker room before U.S. Congress passed the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006. However, the company’s revenue has dipped every year since it suspended its real money gaming business with U.S. customers and has struggled to compete with sites like PokerStars and Full Tilt Poker, which still accept money from the States. PartyGaming reported poker revenues of €64.4 million for the first half of 2010, compared to €71.2 million in the first six months of last year. In 2009, PartyPoker’s net revenue for the first half dropped 29% from the same period in 2008.
PartyGaming was still able to compensate for its subpar poker numbers in other areas. Casino revenues climbed 23% to €76.4 million for the first half of this year, while sports betting revenue climbed 89% to €10.2 million and bingo revenue soared from €1.2 million to €25.8 million a year after the company acquired Cashcade Ltd.
“We delivered another robust financial performance in the first half and also made great progress in executing our strategy,” said PartyGaming CEO Jim Ryan. “While poker was impacted by the football World Cup and remained difficult from a competitive perspective, our other verticals continued to perform strongly. Total revenue was up 30% and Clean EBITDA from Continuing Operations was up 14% versus the prior year.”
It wasn’t all bad news for PartyPoker. Key performance indicators revealed that the site saw an increase in active player days for the first half of 2010 (9.6 million compared to 9.1 million in 2009), daily average players (53,200 compared to 50,000 in 2009), and new real money sign-ups (263,500 players compared to 253,200 in 2009). The company reported decreases in yield per active player day (€6.7, down 15%) and average daily net revenue (€356,000, down 10%).
The merger with Bwin, which is still subject to approval by at least 75% of the shareholders of the two companies, would create the world’s largest publicly traded online gambling company. The new group would be 51.6% owned by Bwin, with PartyGaming holding the rest, according to reports from late last month. Ryan and Norbert Teufelberger, Bwin’s co-CEO, would be co-CEOs of the new company, which would be listed in London.
Said Ryan, “Our proposed merger with Bwin is a transformational opportunity for the group and we expect that it will provide significant strategic, operational and financial benefits for the shareholders of both companies. Whilst there is much work to do ahead of completion in early 2011, we are excited about the prospects for what will then be the clear market leader in online gaming with strong positions in all key product verticals and territories.”
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