Online consolidation thread

[MC]

http://www.egrmagazine.com/news/579367/breaking-news-partygaming-and-bwin-to-merge.thtml?utm_source=daily-snapshot&utm_medium=newsletter&utm_campaign=daily-snapshot

[tikay]

In a spooky piece of timing, yesterday, in "Online Poker Lag" I mentioned the fall-off in Online poker traffic & revenues globally, & the likely industry consolidation that surely must follow. (Source = EGamingReview)

Today, Party Gaming & BWin announced their wedding.

PS - Some years ago, when Party gaming's shares were languishing at about 17p, I said they'd be dear at half the price. They traded at 333p today.

PartyGaming and Bwin will merge to create the world’s largest listed egaming company, the firms announced to the London Stock Exchange (LSE) this morning.

The alliance will see Bwin become the majority shareholder with 51.64% of the newly merged business, while PartyGaming will own the remaining 48.36%. The company will be listed on the LSE. Bwin is currently the largest publicly listed egaming company with a market cap of around €1.4bn, while PartyGaming is second with a market cap of £1.1bn.

The merged company will have pro-forma 2009 net gaming revenue of €682m (£571m) and earnings before interest, tax, depreciation and amortisation of €196m.

PartyGaming’s and Bwin’s share prices both rose following the announcement. PartyGaming shares climbed 30 per cent to 333p while bwin shares were up 12 per cent to €39.90.

Jim Ryan, chief executive of PartyGaming, and Norbert Teufelberger, co-chief executive of Bwin, will become co-chief executives of the merged company. Current Bwin co-chief executive Manfred Bodner will become a non-executive director on the board of the enlarged group.

There will be a balanced management structure for the merged company, with equal representation from PartyGaming and Bwin. Martin Weigold of PartyGaming will become the new merged company’s group finance director, while Joachim Baca of Bwin will become its chief operating officer.

Ryan said: “This is a transformational opportunity for both our companies to create the world's largest listed online gaming business. With market-leading positions in poker, sports betting, casino and games (in particular bingo), the enlarged group will have a winning formula to exploit the growing online gaming market, supported by a strong balance sheet, significant cashflow generation and a highly experienced management team.”

Teufelberger said: “This merger of equals makes great strategic, operational and financial sense.  We will be in pole position to capitalise on the wealth of opportunities that will flow from the continued evolution and expansion of the global online gaming industry.”
A merger between the two publically listed companies has long been rumoured. During PartyGaming’s strong fourth quarter results announcement in March, “active discussions” between the two companies were reported.

The merged company will continue to be based in Gibraltar. Upon the completion of the merger, which is expected to be in the first quarter of 2011, Bwin shares will be de-listed from the Vienna Stock Exchange and the shares in the combined entity will be listed on the LSE.

The deal has the backing of 28.5% of PartyGaming shareholders – founder shareholders Ruth Parasol and Russ DeLeon and CEO Jim Ryan – and 14.4 per cent of bwin’s existing share capital.

[tikay]

Accotrding to the same source, meanwhile, Poker Revenues at Rank (Blue Square & Grosvenor.com) etc tumbled an astonishing 41%.

"....Continued growth from Mecca Bingo and the relaunched Gcasino brand helped Rank Interactive post a 10% year-on-year rise in first-half revenue to £27.4m, from £24.9m
.
Operating profit from the online division however tumbled 23% to £2.3m for the six-months to 30 June 2010, from £3m for the same period last year.

Owner Rank Group said this reflected substantial investment in marketing and product development, as well as £0.3m of start-up costs in the Spanish and Italian markets.


Mecca Bingo revenue rose an impressive 20.7% to £19.8m, from £16.4m the previous year, driven by increased marketing investment, including the bingo site’s deal with Britain's Got Talent, a £0.7m TV advertising campaign, and improved cross-selling to customers from Mecca Bingo clubs.

The gaming operator said the MeccaBingo.com site will be relaunched in the second half of the year, following an extensive overhaul.

Casino revenue rose 25% from a low base of £2.4m, to £3.0m, as a result of cross-selling the online product to customers of Rank’s land-based G Casino and Grosvenor Casinos.

The World Cup-effect however failed to arrest the ongoing decline in revenues from the Blue Square sportsbook, which fell 18% year-on-year during the first-half of the year to £3.6m, from £4.4m. The group said this also reflected a reallocation of marketing spend away from Bluesq.com to MeccaBingo.com and GCasino.com.

There was also a near halving of revenue from poker revenue, which declined 41% to £1m, from £1.7m, which the group said reflected a reallocation of marketing support away from Bluesq.com to MeccaBingo.com and GCasino.com as well as a sector-wide reduction in online poker revenue....".
 

[Wardonkey]

Old news...

http://blondepoker.com/forum/index.php?topic=49027.msg1213385#new

[tikay]

Probably best if I reproduce this one (same source) without further comment.

"....Sky Betting and Gaming has seen its annual gross margins rise 21% driven by strong growth in online gambling and a boom in mobile take-up, managing director Richard Flint exclusively told eGaming Review this morning, on the same day as parent company BSYB also announced its yearly results. 

Flint said that gross margins, after free bet costs, were up 21% to £58m from £48m, while profits had risen by 50% compared to the same period to the end of June last year. 

“The huge take-up in mobile, which has trebled in the last six months as well as our more efficient use of our marketing budget on Google, TV and online, has driven growth,” he said. 

“More than 80% of our growth is online, however mobile is now our second biggest channel overtaking interactive TV and our call centre. The iPhone has been massive. The ability to bet straight from our app on an iPhone has been very popular and allows players to get much closer to our content.” 

Almost 1.5 million people have downloaded the Sky Sports Score Centre app on the iPhone, the Sky Betting managing director said. 

He added a potential resurgence in interactive television could take place in the next 18 months as parent company and satellite TV group BskyB begins to roll out broadband-enabled set-top boxes to households across the UK. 

Sky Betting and Gaming runs five websites including Sky Bet, Sky Vegas, Sky Poker, Sky Bingo and Oddschecker....".

[tikay]

Old news...

http://blondepoker.com/forum/index.php?topic=49027.msg1213385#new

Old = slow. I am old. Anyway, I needed a vehicle to slude that bit of SP puff in.

[AndrewT]

I wonder if Betfair knew this was happening.

[Jamier-Host]

The group said this also reflected a reallocation of marketing spend away from Bluesq.com to MeccaBingo.com and GCasino.com.

 

That wasn't frustrating...

[bobby1]

The group said this also reflected a reallocation of marketing spend away from Bluesq.com to MeccaBingo.com and GCasino.com.

 

That wasn't frustrating...

Never mentioned this before but the single biggest reason for leaving the poker room  I worked for was that after a 3 year profit growth of 300% the poker budget for the next year was halved yet the target % profit increase doubled.

Net result was they poker profit fell away the next year(and the next) but the relocated marketing funds helped the casino and bingo to thrive.

[AlunB]

PS - Some years ago, when Party gaming's shares were languishing at about 17p, I said they'd be dear at half the price. They traded at 333p today.

They did a 1:10 stock split so that's effectively more like 17p to 33p. But still double your money!

[Pawprint]

I wonder if Betfair knew this was happening.

Was just thinking that myself

[TightEnd]

PartyGaming, owner of PartyPoker.com, today announced its first half 2010 key performance indicators. Poker revenue fell 9.6 percent in the first six months of this year to €64.4 million compared to €71.2 million in the first six months of last year.

However the company more than compensated for this with strong performances in sports and casino helping drive total revenue up 30 percent to €181.2 million in the period compared to €139.9 million a year earlier.

CEO Jim Ryan, who recently reached agreement with bwin on merging the companies next year, said “While poker was impacted by the football World Cup and remained difficult from a competitive perspective, our other verticals continued to perform strongly.

“As previously announced, Clean EBITDA margins in the first half were slightly lower than expected due to the delayed launch of cash game poker in Italy but we retain our previous full year guidance of approximately 28%, subject to the returns achieved on planned marketing spend in both France and Italy where we are continuing to expand the share of our respective poker networks.”

Other key performance indicators for poker showed active player days declined to 2.5 million in the first half of 2010 from 3.9 million in the first half of 2009, daily average players in the same period fell to 13.8 million compared to 21.3 million, and new real money signups declined to 76,100 from 128,300.

Yield per active player increased to €14.5 from €13.4.

[tikay]

And Ladbrokes reported their Results yesterday.

In an otherwise half-decent set of results, Online Poker was far & away the class dunce.

Online Revenues were 15% down, & player numbers in the last 6 months a staggering 30% down.

The Results are easily available via google.

[tikay]

Further to Rich's comments on Party Gaming, there's a chilling analysis of Party Poker & Online Poker traffic trends here....

http://www.egrmagazine.com/blog/580407/online-poker-differentiate-or-die.thtml?utm_source=daily-snapshot&utm_medium=newsletter&utm_campaign=daily-snapshot

[AlunB]

Don't forget 888 whose poker numbers were also down.

Party's numbers interestingly appear to be as much a factor of the type of player they are getting as the amount.

New player numbers were up on the same period.