iGaming business update: May 9, 2011
In the wake of the U.S. online poker shutdown, the rest of the online gambling world is soldering on, with some pretty big announcements related and unrelated to Black Friday.
Is the company that owns poker sites UB.com and Absolute Poker going bankrupt because of last month’s domain name seizures? The company denies it, but the situation doesn’t look good.
“The company is currently restructuring and is focusing its resources on consolidating its non-U.S., rest-of-the-world operation and software business,” company reps told the media. “In order to have a more efficient and successful future business, an immediate need to downsize and streamline operations significantly at both online poker rooms has been required. Absolute Poker and UB continue to operate their non-U.S.-facing business.
“This decision comes after considerable review and analysis of the impact that ‘Black Friday’ has had on the business as a whole. The workforce has been liquidated, and the process of rehiring approximately 20% of staff in key positions has commenced. All affected employees have been informed of this necessary restructure.”
The statement emphasizes that the company, here referred to as “Blanca Games,” has not filed for bankruptcy.
Bwin.Party bumps up
Bwin.Party fans can celebrate: The new company is finally reporting some good financial news. The company reported first-quarter net revenue at 217.8 million euros ($317 million), a two percent rise that was credited to online sports betting and casino gaming, which continue to carry the company’s struggling poker offering, reports Bloomberg.
888 shakeup continues
And just weeks after the surprise departure of CEO Gigi Levy, more 888 executives have announced their departure, including Dragonfish CEO David Serah and Brian Mattingley, described as a “senior independent non-executive director” by EGR.
New executive for Betfred
The UK’s fourth-largest bookmaker, and leading online sportsbook, Betfred has announced the appointment of a new managing director for its online gaming operations, Chris Sheffield.
Sheffield is the former CEO for International Game Technology (IGT)’s mobile gaming arm, reports Online-Casinos.com, and will be responsible for Betfred’s “online gambling portfolio.”
William Hill: U.S. market still the big trophy
Some companies are still working hard to enter the U.S. market, despite all the recent political upheaval. Leading UK bookmaker William Hill has just acquired an American sports betting company, American Wagering.
And, according to the Motley Fool, “William Hill is clear this is only a start of its investment in the US. These acquisitions give it an experienced local management team, access to a Nevada gaming licence, and established regulatory and industry relationships.”
In describing the deal, the Las Vegas Sun’s Liz Benston outlines the sharp difference between sports betting in the U.S. and in the UK.
“In its first quarter earnings report last week, William Hill reported a 21 percent increase in operating profit driven by a 54 percent increase in its online sports betting business and a 62 percent increase in wagers,” Liz Benston writes at the Las Vegas Sun. “Between mobile forms of gambling and action generated in more than 2,300 betting shops in Britain and Ireland, the company generated net revenue of $1.8 billion and operating profit of $457 million last year.
“Despite its dominance in Nevada, American Wagering’s balance sheet is anemic by comparison. The company reported a loss of $1.8 million for the nine months ended Oct. 31 and generated revenue of only $14.5 million for the year ended Jan. 31, 2010. The company filed for Chapter 11 bankruptcy protection in 2003 and emerged in 2005, only to see business decline in the recession.
Benston writes that the deal may signal a shift for Vegas sports books to adopt more UK-friendly business practices. That’ll be hard to do under current regulations, but William Hill seems to be betting on those regulations to change.
“It’s a great opportunity to create a robust and highly competitive business with increased scale,” William Hill CEO Ralph Topping the Sun. “There’s a lot of work to be done in strengthening these businesses … But I don’t overpromise, and we take a long-term perspective. I want to learn from (Nevada casino operators) and build some confidence in William Hill. I don’t want to be some silly guy from the U.K. telling Americans how to run their business.”