The mid-year financial report is in at PartyGaming and while earnings are up for the company’s online casino, sports betting and bingo ventures its online poker room PartyPoker saw a 29% dip in earnings compared to this time last year. Overall, PartyGaming profits were down 6.5% from 2008, but in a recently issued earnings report the company remained positive about its future in the online gaming industry.

The report, released on August 28th, cited the overall economic downturn, currency movements and an increasingly competitive online poker market as the three major factors affecting their overall financial performance thus far in 2009. In the company’s year-end report for 2008 PartyGaming Chief Executive Officer Jim Ryan echoed similar sentiments about competing online poker sites, most notably those who continue to serve US customers in the years following the passage of the Unlawful Internet Gambling and Enforcement Act (UIGEA) in 2006. Since it pulled out of the US online poker market in 2006, PartyPoker has struggled to keep up with sites like Full Tilt Poker and PokerStars, both of which still accept real money players from the States.

PartyPoker’s net revenue for the first half of 2009 dropped to $102.6 million from $153.9 for the same period in 2008.  The company’s online casino, bingo and sports book also saw drops in net revenue, but their dips were minimal in comparison to the drop for the online poker room.  In fact, the PartyGaming online casino outperformed PartyPoker earnings by more than $10 million.

It was not entirely bad news for PartyPoker as the report highlighted several areas in which the site was making strides. While the poker room did report 20% drops in active users and daily number of customers, it did experience gains in new real money account sign-ups with 250,300 new accounts so far in 2009 compared to 235,200 in 2008.  The report also gave credit to the newly revamped loyalty program for PartyPoker customers for helping to increase player retention rates from last year. However, despite the increased retention the site still saw a noticeable drop in unique users over the period, down to 532,000 players from 2008’s 698,300 players. According to the report, PartyPoker currently holds a 7% market share of the global online poker market, down slightly from 8% in 2008.

The report also lauded the fast success of their Italian online poker venture Intralot. The tournament-only site launched in May of this year and quickly established itself as one of the top Italian poker sites. PartyPoker also expects to be able to offer cash games on Intralot before the year is over, which should lead to an even stronger performance in the second half of 2009.

A statement from Ryan affirmed that PartyGaming would continue seeking out business to business deals like the Intralot deal. In 2009 the company also acquired the European bingo venture Cashcade, inked a deal to develop an online casino for the British television station Five and, most recently, acquired World Poker Tour Enterprises for $12.3 million last month. “Our B2B strategy has delivered four deals so far this year that will start to contribute during the final quarter of 2009”, said Ryan. “With more deals in the pipeline we remain confident that we can continue to grow this important new source of revenue.”

Since the report’s release PartyGaming’s stock, which is publically traded on the London Stock Exchange under the symbol “PRTY”, has dipped. After trading at a monthly high of 276 pence on August 25th, shares were trading as low as 235 pence on September 2nd.


2 Comments

  1. chip says:

    Party poker just destroyed its play chip ste by taking everyone’s bank away driving its play money players to other sites while allowing its real money players to mintain thee play money chips….sure sounds like DISCRIMINATION….if your taking awy play money chips take from everyone ….its a sad day for pary poker and maybe the start of their downfall….if they can’t be trusted with play money, who in their right mind would have or open a real money account with party poker….think about it before you open a real money account with PARTY POKER

  2. Francisco says:

    ¿Are you talking about Play Chips? Real Money Players don’t care about Play Chips and Play Chip money dont produce rake.
    True Party Poker is in trouble, I’ve been frequent for 5 years and the traffic is not what it used to be, no Promotions and the Party point System has changed from flop seen to rake based. These are a more real causes of the decrease in business not the discrimination to players.

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