October 1, 2009
REVENUES DOWN,BUT CIRSA ACHIEVES EARNINGS GROWTH
Cirsa overcame a drop in revenues to post pre-tax earnings of €102 million in the first half, a 6 percent increase over the same period last year.
Revenues were down 5.4 percent to €815 million, from €862 million a year ago, but the Barcelona-based slots and operations giant said it was able to boost earnings thanks to geographic diversification, a strict monitoring of expenses, increased efficiencies and smart investing.
Results from the company’s operations in Panama, Argentina and Venezuela were particularly strong, contributing about 54 percent to EBITDA growth, aided by expansions in Panama and Colombia. New bingo hall openings in Mexico combined with improved machine gaming revenues to offset the negative impact of swine flu. And the first week of October was scheduled to see a new Cirsa casino open in Rosario in Argentina, and a new casino is scheduled to open in Valencia in Spain later this year.
On the betting side the Sportium brand in the Madrid region is expected to add 25 venues for a total of 100 by the end of the year, the company said.
DRAGONFISH SELECTED TO PUT HARRAH’S ONLINE
Harrah’s Interactive Entertainment has selected 888’s Dragonfish B2B division to support its entry into Web gambling with poker and casino software, an e-payments platform and CRM, customer support and VIP services.
Harrah’s World Series of Poker and Caesars Casino brands are reported to be part of the launch, according to a report on the Gaming Intelligence news portal.
888 Holdings Chief Executive Gigi Levy called it a “groundbreaking deal”.
“We have the structure in place to realise our B2B division’s full potential over the next 18 months and beyond,” he said, “and our partnership with an industry giant is further vindication of this strategy.”
Mitch Garber, CEO of Harrah’s Interactive Entertainment, said, “We have chosen to work with 888, primarily for their world-class technology, scalability and a strong commitment to compliance and responsible gaming.”
The deal was a bright spot in a challenging first half for 888 Holdings, which saw significant declines in revenues from both its casino and poker operations.
Total revenue was down 13 percent to US$117.9 million, compared with the same period in 2008. Casino revenue was down 20 percent to $55.9 million. Poker saw the biggest decline, with revenue from online portal Pacific Poker down 35 percent to $26.2 million.
The company blamed the results on currency fluctuations and the impact of the global economic downturn.
Dragonfish, in the meantime, has brokered several major deals this year in addition to Harrah’s, working with the UK’s Racing Post to develop an online casino and sports book, developing casinos and poker rooms in the Balkans and partnering with several small online bingo companies. Revenues for the division were up 42 percent to $24.3 million through July.
BETFAIR’S GOOD YEAR: USERS UP 25 PERCENT, REVENUES HIT $492M.
Revenues for world-leading betting exchange Betfair increased 27 percent in the 2009 financial year to US$492.3 million.
The number of active users grew to 652,000, an increase of 25 percent over 2008. Customers from outside the UK contributed 49 percent of total revenues, compared with 44 percent last year. Betfair, which is based in the UK, said it currently holds more than $389 million of bettors’ funds on deposit.
The company performed well across all operations.
Revenue from its sports business grew by 20 percent and in the games division by 31 percent, driven by the launch of Arcade and other new products. In Australia the lifting of an advertising ban led to a 40 percent growth in revenue. In the United States the $50 million acquisition of TVG Network means Betfair now holds licenses in seven countries.
SCIENTIFIC GAMES WINS BIG ISRAELI CONTRACT
The Israel Sports Betting Board has concluded an agreement with U.S.-based Scientific Games for new online betting terminals, including delivery of up to 2,000 of the company’s new WAVE terminals.
The first WAVE installation of 600 units will take place this year. The agreement also provides for maintenance and project services for a period of five years with an option to extend it for two additional two-year increments.
The contract is expected to produce US$8.6 million in sales revenue for publicly traded SciGames and $1.7 million in annual service revenue.
ISBB, the government-sanctioned sports betting monopoly, had online revenues of €290 million (US$406 million) last year. Its profits are dedicated to advancing sport in the country by funding teams, organizations and associations, infrastructure and Olympic sports.
ITALIAN POKER SITE ACQUIRED BY BWIN FOR €50 MILLION IN CASH AND STOCK
Online operator bwin has reached an agreement with Italy’s Gioco Digitale to acquire 100 percent of the popular poker Web site for stock and cash.
Gioco Digitale’s shareholders will trade 56.3 percent of their equity for 2.3 million bwin shares. The balance of the company bwin will acquire for an initial €25 million in cash, another €20 million payable on presentation of Gioco Digitale’s audited accounts for 2009, and €5 million payable 18 months after closing subject to the achievement of certain financial performance targets in 2009.
The acquisition, scheduled to be concluded early this month, bolsters bwin as an online gaming force in Italy.
In the first half of this year Gioco Digitale generated EBITDA of €9.2 million on net revenues of €20.1 million. In 2008, revenues for the entire year were €13.7 million and pre-tax earnings €1.5 million.
DANSKE SPIL LOSES TRADEMARK CLAIM IN LAWSUIT AGAINST LADBROKES
A Danish court has backed Ladbrokes against the country’s gambling monopoly, Danske Spil, in a dispute over trademarks.
At issue was a TV advertising campaign Ladbrokes ran last year touting “Danish game, English odds”. Danske Spil sued, claiming the UK bookmaker had improperly used its trademark and that only Danske Spil could use the word combination “Dansk” and “spil” for commercial use in advertising and marketing.
The Maritime and Commercial Court in Copenhagen disagreed, ruling that the monopoly had no exclusive rights to the use of the words professionally.
“We will continue to highlight the disadvantages of monopolies in our sector and promote free and fair competition from regulated operators to the benefit of consumers,” Ladbrokes spokesman Ciaran O’Brien said in a report published by Gaming Intelligence.
ECJ affirms validity of monopolies
The ruling, which is consistent with previous decisions defining the legal scope of the continent’s longstanding gambling monopolies, most of which are government-owned, came in response to a complaint brought by Portugal’s lottery and betting monopoly, Santa Casa de Misericórdia de Lisboa, against Austria-based bwin, one of Europe’s largest privately owned bookmakers, and the country’s Liga Portuguesa de Futebol Profissional.
Santa Casa claimed that a sponsorship, advertising and marketing agreement between bwin and the league was a violation of Santa Casa’s exclusive rights as Portugal’s betting provider. It’s been a long-running dispute in the EU, with private operators like bwin contending that most of the national monopolies operate to maximize government revenues, not to protect their citizens, and therefore their anti-competitive practices are illegal restrictions of trade under Community law.
The ECJ disagreed with that view, at least in the case of Santa Casa.
“The prohibition imposed on operators such as bwin of offering games of chance via the Internet may be regarded as justified by the objective of combating fraud and crime,” the court said.
The ruling was hailed by monopoly proponents.
“This strengthens the hand of national governments and lotteries in controlling what gambling takes place on the Internet,” said Rupert Hornig of the European Lotteries and Toto Association.
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