PartyGaming raises stakes with blackjack boom

Poker players attracted by the potential riches of the blackjack tables today helped online gaming firm PartyGaming to beat market hopes for fourth-quarter revenues.

PartyGaming said 44% of gamblers on its flagship PartyPoker.com website had played blackjack since it was introduced in October and this brought “a substantial and sustained impact on the profitability of the group”.

Revenues in the final three months of 2005 were 65% higher than a year earlier at $320.3m (€262.4m), leading London brokers including Dresdner Kleinwort Wasserstein to upgrade their forecasts for annual profits.

Dresdner analyst Andrew Lee said revenues in the final quarter were 5.4% ahead of his forecasts and noted that PartyGaming was winning its battle to find more players outside the United States.

One third of the record 229,277 players signing up to play poker for the first time on websites operated by PartyGaming lived in countries other than the US, reassuring investors worried about the legality of online gaming in the world’s biggest economy.

Shares in PartyGaming surged 6% to hit their highest level since September when a cautious trading update sparked an exodus of investors from the online gaming sector.

Chief executive Richard Segal said the success of blackjack had transformed its casino business, which generated revenues of $82.3m (€67.4m) in the fourth quarter compared with $10.6m (€8.7m) at the same stage of 2004.

He added: “Our scale has again proved commercially important. Through effective cross-selling to our large customer base we are well on the way to creating the world’s largest online casino.”

A total of 15.4 million players are currently active on PartyGaming websites compared with 9.5 million at the same stage of last year.

In the first half of this year, PartyGaming will introduce a “shared purse” so that its customers need to register and leave their bank details just once when playing more than one of its websites.

This increases the chances of clients staying longer to gamble and spending more money, while the company said it would also launch two new games over the next 12 months.

“By the end of 2006, we will up the ante again by launching a multi-lingual and multi-currency offering,” Mr Segal added.

“Marketing a wide range of quality games to an increasingly international customer base is a core part of our strategy.”