PartyGaming poker revenues recovering from US crackdown
By Julia Kollewe
Thursday December 14, 2006
Guardian Unlimited
Poker revenues have picked up at PartyGaming, the online gaming group, as it recovers from a US crackdown on internet gambling. The online gaming industry was plunged into chaos in October when the US tightened anti-gambling laws, forcing PartyGaming and others to pull out of the world's most lucrative gaming market.
PartyGaming said today that daily poker revenues averaged $721,000 (£366,000) in the past four weeks after hitting a daily low of $637,000 in October.
The group, which previously generated three-quarters of its profits in the US, said it had been hit by the defection of some of its bigger gamblers outside the US to privately owned poker websites that were ignoring the ban.
Punters have switched to the rival sites because they offer a bigger pool of players.
Although PartyGaming's operating margins fell "significantly" in the immediate aftermath of the US crackdown, this has been partly offset by new player sign-ups, which have averaged more than 1,400 a day.
PartyGaming has had to slash 945 jobs across the group, or 41% of its workforce, as a result of its withdrawal from the US. It also lost its place in the FTSE 100 index as its shares plunged in the wake of the clampdown.
Its shape has changed radically from a US-focused operator as it now relies on Europe, the Middle East and Africa for two-thirds of its gross daily revenues and 80% of new player sign-ups.
PartyGaming launched a German version of PartyPoker.com at the end of November, the first of several planned multilingual versions. It also intends to take payments in more currencies from next year.
Canada, Latin America and South America account for 27% of daily revenues and 15% of new players while Asia Pacific remains a small contributor.
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