Blood, sweat, tears, and caffeine

After the gold rush

Building excitement

On your marks

E is for ethics

Starting over

Time to join the grown ups

Analyze this!

What do developers

Germany inches

IQL diversifies

The Poker Channel

Tote goes to Orbis

Balls to win

Losing pounds for pounds

Poker Share re-surfaces

Sweden first with state owned poker

Industry News

Unfamiliar Answer

Small successes

 

 

 

 

 

Poker Share re-surfaces on Tain

Following the resolution of its dispute with Game Theory and original network provider Excapsa.  PokerShare has relaunched on the Tain network.  The PokerShare site had been out of action since November 2005 after Excapsa cut off the rights to the poker platform in the US following PokerShare’s success in bringing players, at the expense of network partner UltimateBet.

      PokerShare’s concept is to give players a stake in the company.  This ‘earn while you play’ idea will continue following the relaunch, while the company is also planning a May launch of a casino, CasinoShare.com.
      Only existing real-money players can use the site again, which is currently in beta stage.  Max Wright, poker room manager, said: “We are excited to return the market. We have a great new product which I am sure will be a hit with our old players.  I want to get as much feedback as possible before we open the doors to new players next month.”       Lucan Toh, chief executive of PokerShare, said: “PokerShare was the first poker site to offer its players the opportunity to share in its success.  We are extremely proud of this and excited about welcoming back our loyal customers on the Tain poker nertwork.  We are looking forward to a long and prosperous relationship with Tain.” The company said it chose the network due to Tain’s focus on real-money players, and network prominence in Europe. 
      Roberto Savio, director of sales and marketing at Tain, said: “This is the start of a long and exciting relationship.  PokerShare is a site that puts the customer first and that fits in with our overall philosophy.  I am looking forward to a healthy future with PokerShare.”

*   Japanese firm snaps up 23% stake in Betfair
Nearly a quarter of Betfair is to be acquired by Japanese technology and venture capital company Softbank.  Under the terms of the agreement, first announced in March, Softbank will pay a total of £ 355m (US$ 622m) for 23% of the company.  The deal effectively values the betting exchange at £ 105bn sees many of the original investors cashing in a proposition of their equity holding.


      According to reports, founders Ed Wray and Andrew Black both cashed in 1% stakes.  Together, both retain a 26% stake.  It is believed other investors, including private equity groups such as JP Morgan Private Finance, UBS Capital, Benchmark Capital and Index Ventures, cashed in part or all of their holdings.  According to last year’s results, Betfair made an operating profit of £ 22m and has around 95,000 active users.
      Although Japanese users will not be allowed to open accounts on Betfair due to legal restrictions in Japan, Softbank may seek to use Betfair’s technical expertise and products such as its Application Programming Interface (API), which enables users to customize their own betting tools and interface.
      Softbank has started to transmit live broadcasts of Japanese horserace via an agreement with Yahoo! Japan and has launched a regional online portal, Odds Park that offers racing information at four grounds in Japan.

PE interest in Paddy

A recent analyst note suggests Paddy Power could become the target of private equity (PE) interest.  The High Risk Buy note from Richard Taylor, leisure analyst at Citigroup, said the company  is an attractive target due to its highly underleveraged balance sheet.
      “Paddy Power will have € 58m ( US$ 71m) of net cash and our positive recommendation is predicated on the chronically underleveraged balance sheet,” said Taylor. “The new management team may be reluctant to solve this ‘problem’ immediately, but we think ultimately it has to be.”

      Taylor added the company might wish to “solve its capital structure problem itself”, either through a special dividend or via an acquisition.  But commentators were skeptical of the company’s attractiveness to private equity.
      “That is just a lazy comment,” said Ben Hewetson, leisure and gaming specialist at private equity house HgCapital.  “It is trading at 12 times EBITDA, so it is highly rated, and you would need to pay a premium over that to buy it.”
      Citigroup noted that following Paddy Power’s recent results, there were fears regarding competition in the country’s home Irish market and the ongoing threat from betting exchanges.
      However, it added the cash-rich nature of the balance sheet made the present P/E ratio of 18 misleading.  The note also highlighted the online business as the section of the company with the best growth prospects.

*   GameAccount deal with paper
The UK’s Guardian Unlimited website has launched a person-to-person and skill-gaming service in partnership with GameAccount.  This new facility follows closely behind a Guardian sports-betting microsite in association with UKBetting’s Oddschecker.
      Ten classic real-money multi-player games and tournament including gin rummy, backgammon and tournament versions of mah jong and solitaire will be available.  Skill gaming may represent a new move for The Guardian, but according to Meir Moses, marketing manager at GameAccount, it indicates new audience opportunities.


      He said: “It’s a different audience from the tabloid newspapers, but The Guardian’s sports readership is into betting and represents a high-value chain.  The Guardian’s website and online presence leads the way for other newspapers.”
      Annie Wilson, online partnerships manager at Guardian Newspapers, stressed she did not consider  this site to be a gambling  outlet, and rejected the suggestion collaborations have been more the preserve of the tabloid industry.
      Wilson said: “We have a long term partnership with Blue Square (launched in 2000), so this isn’t a new direction for us.  “Neither do I believe gaming is a tabloid area.  Rather the GameAccount deal is an extension of our existing content, such as the Gamesblog, and our existing games, including ‘Fantasy Chairman’, sudoku and Kakuro.”
      She added that UK broadsheet national newspapers such as The Times, The Daily Telegraph and The Independent all had games channels.

Q1 results buoy Party boss

Although barely having placed his feet under the desk, incoming PartyGaming Chief executive Mitch Garber saw the company boasting forecast- busting first –quarter results in mid-April.
      The results showed group revenue showed group revenue rising 54% to US$ 343m for the first three months of the year with new real-money sign-ups rising to 263.254.  Marlin Weigold, group finance director, stressed the company’s commitment to continued organic growth ahead of Garber’s arrival in Gibraltar.
      “It’s hectic, but we are pleased with the numbers.  The strong financial performance from 2005 has continued into 2006.”  Garber has taken over from Richard Segal, who will continue with the company until the end of May to help Garber through the transition period.
      With the publication of the first-quarter key performance indicators.  PartyGaming has also launched a backgammon product as it seeks to diversify away from its main poker product.  The company’s blackjack product, launched at the end of 2005, continued to show good growth

      Weigold said: “We are trying to diversify the business in terms of the games and the geographic make up.  Backgammon is a popular game – the oldest one.  Our strengths are in poker and backgammon.  If you look at the demographic profile, they are complementary.  What we do is strong in the Mediterranean countries and the Middle East, and we would expect to get a disproportionate number of players in those markets.  We are not saying that for absolute numbers than it will be higher the US.  You would have to be bold to predict that given the number of players in the US.”
      European marketing initiatives have also been regarded as a success, and PartyGaming is looking to diversity its marketing tactics.
      “We are considering more activities around promotion of the brand.  Historically, most of our marketing functions have been on direct marketing functions have been on direct marketing.  This year we have two games to launch so we will put money into those.” 
      With regards to acquisitions, Weigold said the company was concentrating on growth: “We are continuing to look around and if something comes up from which we can extract value and it is at the right price, we would look at that right price, we could look at that to complement our organic growth.”

Analysts: Empire results as expected

Despite a decline in First-quarter revenues for poker and casino operator Empire Online, industry commentators and analysts reiterated their view that the Cyprus-based firm’s performance was “in line with expectations”.  Empire is expected to reach its forecast full-year 2006 EBITDA of US$37m.
      However, the performance of the owner of the Noble Poker and Club Dice websites was said to be difficult to gauge completely accurately as there were no empirical figures and indicators to work from since the sale of Empire Poker to PartyGaming for US$250m at the end of 2005.
      Empire’s update showed it was growing its two newest brands strongly, as they benefited from the company’s strong marketing and promotional skills.  However, Robin chhabra and Tej Randhawa, analysts at Evolutions Securities, said the company’s interim figures would be a better indicator of its level of performance without its most well-known brand.

      “We look to the Q2 numbers to assess the growth excluding Empire Poker,” they said.  Empire revealed Q1 2006 net gaming revenues of US$21m, down from US$22.5m in Q4 2005.
      Casino revenue was US$15.3m, up from US$11.2m on a quarterly basis and US$5.6m year-on-year.  Income from poker, without a full contribution from Empire Poker, was US$5.8m, down from US$11.3m on Q4 2005.
      Chhabra and Randhawa added that the company’s sign-ups stood at around 450 a day and highlighted “the rapid growth of Club Dice and Noble Poker and the company’s marketing expertise.”
      Empire reiterated its aim of using the US$250m “war chest” it has at its disposal to acquire “complementary businesses such as sports-betting.  (and) skill-based gaming companies”.
      The company intends to create a “more diversified group with the introduction of shared wallet technology and more effective cross-marketing” with a broader geographical reach.

News in brief

  • FUN  Technologies has signed an agreement with UK satellite broadcaster BSkyB to provide fantasy sports games and content for the Sky Sports portal.  FUN’s Fanball subsidiary will build, host, operate and maintain an online fantasy sports site which will launch for the FIFA World Cup.
  • Orange has stepped up its marketing effort promoting Gaming Corporation’s mobile casino through its Orange website.  Gaming Corp confirmed that as a result, player registrations were up 50%.  There had also been a 15% conversion rate to real-money players, with the average net drop per player at £ 300 (US$ 500).
  • The UK’s horseracing TV Channel, Racing UK, has signed a deal with new poker site, PKR.com, to sponsor all live evening racing on the channel over the summer flat season.  The deal includes three stings per hour on all Racing UK’s live evening coverage from 1 May until 31st August – over 100 UK fixtures. PKR.com will also benefit from a presence on Racing UK’s website  as well as a poker CD mailout to all Racing UK club members in the June newsletter.
  • As a consequence of BetandWin’s (BaW) acquisition of Swedish network operator Ongame, BaW has decided to focus its poker operations on Ongame’s platform as of June 2006.  This is at the expense of BaW’s present deal with Boss Media. Currently, BaW poker accounts for around 10% of Boss’ total royalty revenues.
  • Kiwi Gaming has launched live gaming with real dealers at its tables via a live video feed.  Games offered include blackjack, roulette, baccarat and sic bo. Bets are made in the same way as in the standard online versions, but players can chat and see Kiwi Casino’s dealers while they play.

 

 

 

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