PartyGaming dealt football blow

Internet gambling firm PartyGaming today blamed the distraction of the Euro 2008 football championships for a recent dip in trade.

The company, which operates the PartyPoker and PartyCasino websites, said revenues since April 28 had “fallen slightly due to seasonality and competition for players’ leisure time from the Euro 2008 football tournament”.

Shares fell more than 10%, even though the firm said its PartyBingo.com site was “gaining traction”, with the profile of the game boosted by the recent launch of ITV’s interactive Bingo Night Live.

PartyGaming, which saw the number of active players using its casino and poker websites pass the one million mark last year, also said its casino arm continued to perform strongly during the year.

However, this was offset by a weaker-than-expected performance in its core poker business and sports betting, with overall revenues slightly lower than expected.

Strong competition for poker players meant the firm had to increase bonuses and costs associated with some tournaments run during the period.

Broker Numis Securities said: “Overall we think this update is slightly disappointing.”

PartyGaming also said operational efficiencies and lower marketing costs would help underlying profit margins in the first half come in “substantially higher” than a year ago.

The firm also reported a $4m (€2.5m) hit associated with the replacement of chief executive Mitch Garber.

It was revealed earlier this year that the Canadian national would not be renewing his contract beyond May. He was a 0.2% shareholder and had been with the firm for more than two years.

Mr Garber has been replaced by Jim Ryan, formerly boss of internet gaming service firm St Minver.

Numis analyst Richard Carter predicted PartyGaming’s second quarter revenues were down 3% to $124.7m (€79m). Net revenues from poker - which make up more than half of total revenues – could be down 8.3%, he said.

He added that he was not changing full year underlying profits forecast for the firm of $163.3m (€104m).