The A$550 Million Bug
Tabcorp has said it expects turnover to drop nearly A$550 million after an outbreak of equine influenza began to wreak havoc on the Australian horse racing industry last August. "Tabcorp expects turnover will be down approximately A$550 million by the time the industry recovers from equine influenza in the new year," it said in a written statement. Chief Executive Elmer Funke Kupper added that the company's turnover was an estimated A$240 million lower compared to the previous-year period, with wagering turnover in New South Wales and Victoria down 21 percent (A$184 million) and 9 percent (A$67 million), respectively. The company said it expected the performance of its other businesses to mitigate the impact of the loss in turnover.
An Uncharitable Levy
The Sunday Times reported Gala Coral CEO Neil Goulden has warned that unless the gambling industry "makes a voluntary £4 million donation to address problem gambling, it will likely face being hit with a statutory government levy." Earlier this year, U.K. gambling operators, including William Hill, Ladbrokes and Coral, had agreed to raise the sum for the Responsibility in Gambling Trust -- so far, only £1.7 million has been collected. Goulden added that if the money wasn't raised, it "would reflect badly" on the industry while "smaller companies would end up paying more."
888's Q3 Net Gaming Revenue up 37 Percent
Online operator 888 released Q3 KPIs this morning highlighting a 37 percent jump in net gaming revenue (NGR) to $52.5 million versus Q3 '06.
888 Chief Executive Gigi Levy said he was pleased with the results, adding that NGR for the quarter rose 5 percent higher than the previous three-month period.
Levy called September "our best month since we withdrew from the United States," and said that October's figures, fueled by the launch of the group's U.K.-targeted "Playful Minds" televised ad campaign and Italian sportsbook, had already exceeded September's.
NGR for what it termed "emerging offerings" -- bingo and backgammon -- totaled $4.9 million (no figures were reported last year).
The company said NGR for poker and casino was up 24 percent to $47.6 million against $38.3 million during Q3 '06, with active customers up 17 percent to 209,811 against 2006.
Real-money sign-ups were also up 32 percent to 4.4 million versus last year.
888 said that trading for the fourth quarter has "started strongly," and that during the first 26 days of October, daily revenue in casino and poker was up approximately 11 percent against the previous quarter.
Levy maintained that the company is confident about its performance "in 2007 and beyond."
32Red Releases Interim Report, Offloads BetDirect
Nearly a month's worth of speculating ended Tuesday as 32Red, on the delayed release of its interim results, announced it has agreed to offload its BetDirect business to Stan James for £5.75 million.
The company said £575,000 would be deposited on the exchange of contracts today, with £4.675 million on completion, which is unconditional and scheduled for Dec. 10, and the remainder, £500,000, after a six-month period.
"The sale of the BetDirect brand allows us to channel our marketing and management focus on the core 32Red brand," said 32Red Chief Executive Ed Ware.
On Sept. 28, Trading in the London-listed firm was suspended after it missed the deadline to publish its interim results.
For the six months ended June 30, total revenue rose 47.1 percent to £9.2 million against the previous-year period, with casino revenue up 1.7 percent to £4.6 million compared to H1 '06.
Poker revenues, however, were down 3.8 percent to £600,000 versus last year, with poker sign-ups down 0.9 percent on 2006. Registrations were also down, it said, due to increased competition from hitherto U.S.-facing operators that have repositioned their poker businesses in a progressively saturated European market. It added, though, that active poker players had grown by 7.3 percent to 10,662 against H1 '06.
Player yield across the firm's casino and poker business was down 18.7 percent (£426) and 12.3 percent (£57), respectively, compared to last year. "Yield per player is solid at £426 but down on 2006," it said, "and whilst some comfort can be drawn from lower acquisition costs for casino players, this remains an area of focus for the company."
The company said it is looking to expand its presence outside the United Kingdom and is investigating prospects in Europe and market-specific activities in the Far East.
"32Red will also add mobile telephone gaming services and an integrated bingo offering to its product range in the final quarter of 2007," Ware added.
"Whilst the recent U.K. legislative changes effective from Sept. 1, 2007 allow greater access to the U.K. market, we have identified a number of new territories into which we intend to market [the brand]."
Third Quarter Figures from GBGC
U.K.-based Global Betting and Gaming Consultants (GBGC) has released third-quarter statistics for the industry. The firm said it expects the value of the European I-gaming market to be nearly 28 percent greater than that of North America "despite being just 80 percent of the value in 2006 and 60 percent in 2005." Following the enactment of the U.S. legislation last October, GBGC has revised its poker projections -- $3.2 billion during 2006 falling to $2.96 billion during FY 2007. Looking ahead, GBGC said that, should the Frank bill be successfully implemented, it believes the "U.S. online gambling market could be as large as $10 billion in its first full year." GBGC Partner Simon Holliday observed, "Although the interim results were mixed GBGC sees plenty of growth prospects going forward as bingo comes of age, online Europe opens up, and in time operators find opportunities in Asia and finally the U.S. legitimizes online gambling."
Another Round of Cuts at Lottomatica
According to the Providence Journal, Lottomatica subsidiary Gtech has laid off 47 employees at its Rhode Island offices; in all, Lottomatica will cut 125 employees across its global operations, Gtech spokesman Robert Vincent told the paper. "We have taken some personnel actions that are a routine realignment of investments we are making in certain areas," Vincent said. "We are finishing up the integration with Lottomatica." In August 2006, Lottomatica purchased Gtech for $4.8 billion, and last December cut 200 employees, 70 in Rhode Island. The latest round of layoffs comes nine days before the release of the Milan-listed group's third quarter results. Its share price, the paper said, took a bludgeoning in September on speculation that it planned to cut its earnings target for the final three months of the fiscal year.
888, Blue Square to Announce Tie-Up
According to sources with Reuters, Rank Group's Blue Square operation will provide sports betting services for 888. The announcement is expected on Monday, with one source saying, "We expect a pan-European launch in Q1 2008 before also going to other countries as well." On the news, 888 was up 7.50p to 130.50.