As Sportingbet moves away from mass recruitment of players to focus on corralling V.I.P.s, the company grew that segment -- which accounts for 55 percent of total margin but just 3 percent of its customer base -- by 32 percent in the first quarter of the 2009 fiscal year.
Chief Executive Andrew McIver said at a results presentation last week that under the company's marketing philosophy, V.I.P. customers are "man-to-man marked" by territory managers in the jurisdictions which it operates.
"That is a key point for us, I think, particularly in a difficult economic environment you must keep the customers you've got and do the best you can for them," he said.
The company's core sports betting product, which accounts for 64 percent of net gaming revenue, saw active customers increase by just 4 percent, year over year, but average bet size rose 10 percent.
V.I.P.s, Mr. McIver quipped, are, in gambling terms, "middle management," and lose approximately £2,000 per month. What the company termed "recreational" players, by contrast, lose approximately £25 per month, account for 30 percent of total margin and comprise 92 percent of its customer base.
Mr. McIver said that with better service, V.I.P.s are staying with the company 21 months on average, up 23 percent versus 2007, while average play days each month are up 20 percent to 18 days.
Across the quarter, meanwhile, the company grew net gaming revenue 27 percent to £38.9 million over last year, of which European sports betting accounted for £17.7 million, up 18.7 percent.
Casino and gaming contributed a combined £9.9 million, up from £7.4 million in 2007, though poker, £4.4 million, fell slightly from £4.6 million.
Mr. McIver said that in response to United States-facing poker sites capturing more market share in Europe, some operators have responded with aggressive player bonus levels and rakeback schemes with affiliates.
"It is an incredibly competitive market space, and to be quite frank, one we've literally decided not to get into that game," he said.
The company's Australian sports betting business grew 97 percent against last year, generating £6.9 million in net gaming revenue.
After advertising restrictions were relaxed in New South Wales and Victoria in October -- its core markets in Oz -- the company reported active customers were up 41 percent, year on year, to 21,327.
As a result loosened ad restrictions, however, Mr. McIver said Victoria has already introduced a 10 percent tax on gross margin -- with the exception of October and November, during which the duty rate rises to 15 percent.
"We are hoping that New South Wales will look at Victoria and take that as a reasonable rate of tax," he said. "So we're happy with that as the rate of tax, because I believe that New South Wales is provisionally slightly more aggressive in its thinking."
Sportingbet's core markets continue to be Spain, Australia and Greece. Mr. McIver said that good progress is being made in Brazil but that punters there are still learning the ropes of fixed odds betting.
In:play, the company's in-running betting product, generated 49 percent of sports bets in Europe and is growing, Mr. McIver said. Early returns from streaming, which launched in late October, are "encouraging," he said.
In South Africa, where the company's license in Western Cape is awaiting approval from regulatory authorities, Mr. McIver said that Sportingbet will be one of the "early operators."
"We see South Africa as akin to Australia in terms of the likely behavior of the demographics, and I believe we're putting our best foot forward and are slightly ahead of the competition, but I totally forecast that other people will be there as well," he said.
The company made a net profit of £4.8 million, up from a loss of £1.6 million a year ago.