Online firm buoyed by casino growth

Online gaming firm PartyGaming today said its casino operations had gone from “strength to strength” after a 17% surge in average daily revenues.

The owner of brands including PartyCasino and FoxyBingo said significant expansion in casino following the launch of 60 new games and a marketing drive helped deliver an “outstanding” first half performance for the division.

Underlying earnings in casino rose 34.8% to $36m (€25m) in the half year to June 30, with average daily revenues increasing 17% between the second and first quarters of the year.

The gains offset pressure on its PartyPoker division after strong competition left poker earnings 29% lower at $25.7m (€18m).

Overall group earnings from continuing operations fell to $60.7m (€42.3m) from $64.9m (€45.2m) a year earlier.

Chief executive Jim Ryan said: “Casino has been our star performer and continues to go from strength-to-strength, consolidating our position as the world’s leading online casino.”

Year-on-year currency movements meant total revenues fell to $201.3m (€140m), but the reverse impact on its cost base limited the fall in underlying earnings, the company said.

PartyGaming reported a bottom-line loss of $66.9m (€46.6m) due to payments associated with a non-prosecution agreement with US authorities.

The company offered internet gaming to players in the US, including poker, from 1997 until such services were banned in 2006. It voluntarily exited the market when the legislation came into force, but prior to October 2006 some US transactions were contrary to certain US laws.

It has agreed to pay $105m (€73m), payable in stages up until September 2012, in order to resolve the legacy issues.

With many of its competitors still to resolve their issues, PartyGaming said it was in a strong position to make acquisitions at “sensible prices”.

Recent deals have included the €82m purchase of Cashcade, which will boost the company’s position in online bingo.

Bingo revenues declined 32% to $1.7m (€1.2m) after the loss of a contract with ITV resulted in a sharp reduction in player sign-ups, most of which had been generated through the channel’s Bingo Night Live show.