Overhaul of site leads to more players

Nov 20 2008 by Andrew Mernin, The Journal

ONLINE gaming firm PartyGaming yesterday said the relaunch of its PartyPoker site was stemming a decline in its poker customers.

The September overhaul of the world’s fourth biggest poker site had resulted in a “material uplift” in player numbers, the firm said.

Third-quarter poker revenues fell 15% to £43.3m with poker sign-ups down 12% as the company deferred marketing spend in the run-up to the relaunch at the end of September.

PartyGaming is currently battling against the impact of a stronger dollar on revenues, the sharp downturn in the economy and the fierce competition for poker players.

But in the first six weeks of the final quarter to November 11, new poker player sign-ups averaged 1,220 a day, the company added, helped by a new bonus system offering to match customers’ first deposits of up to £332.

There were more than 7,000 active players a day on the site although overall group revenues were down 7% on the third quarter due to the strength of the dollar against sterling and the euro.

Chief executive Jim Ryan said and group was making “solid progress” despite the difficult headwinds faced by the sector. The stronger dollar, while weakening revenues, was having a corresponding benefit on sterling and euro costs, he added.

Overall group revenues were flat at £78.2m compared to the same quarter last year as poker declines were offset by higher sports betting, bingo and casino takings. A marketing push in these areas boosted overall player sign-ups 6% in the third quarter.

Shares in PartyGaming fell 2% despite the company holding its guidance on full-year underlying earnings and margin targets. Numis Securities analyst Richard Carter said his forecasts were unchanged and highlighted the company’s cash generation and takeover potential.