Paddy Power to expand in online casino games market

Paddy Power is seeking to aggressively expand its presence in the lucrative online casino games market, saying the opportunities for success rival those already realised in its successful online sports betting business.

The Dublin-based international betting and gaming services giant has been investing heavily in its online content — much of that in launching its online presence in Italy, Europe’s biggest betting market — and will shortly launch a number of new product offerings, including a sports betting-based social game called ‘BetDash’ and a new mobile casino brand called ‘Roller’.

Online and mobile device use is increasingly driving growth at Paddy Power. The financial results — for the first six months of the year — weren’t merely the latest in a line of impressive numbers, but were actually record first half figures. On a year-on-year basis, pre-tax profits rose by 21% to €68.7 million, net revenue was up by 29% to €311.2m, operating profit increased by 13% to €67.1m and diluted earnings per share jumped by 25% to 121.5c.

The company said yesterday that the scale of its online activities continues to grow “dramatically” — with active customers of 1.2 million up by 41% on the first six months of last year and online net revenues (excluding Australian interests) up by 36%, year-on-year, at just under €128m.

“With our online and retail divisions both continuing to deliver substantial growth and our expansion plans progressing, we’re confident in the group’s prospects for the rest of the year and beyond,” group CEO Patrick Kennedy said.

First half revenues also grew in the company’s telephone betting division (by 34%) while good numbers were also evident in its Irish and British retail divisions. Net revenue was up by 13% — to €57m — and operating profits rose by 79% at its Irish retail division; with one new shop opening since the start of this year.

In Britain, where the company has opened a further 23 shops this year, profits rose by nearly 50% to €7.6m, while net revenues were up by 47% to just under €48m.

Mr Kennedy added that the company benefited more than initially anticipated from the Olympic Games. Turnover generated from the London Games amounted to €30m. Paddy Power was the only mainstream bookies to offer odds-on marginal interest sports like fencing and synchronised swimming.

Mr Kennedy said the company hopes to reach break-even point in Italy by the end of 2014. He added that the company is still seeking opportunities in the US, after being recently approved, by the state of Nevada, as an acceptable licence applicant.

Meanwhile, British operator, 888 Holdings reported an 81% year-on-year rise in first half earnings, driven by interest in its casino and poker products.