Betfair Selling 20 Percent of Company to Japan-based Softbank
British betting exchange company Betfair has signed an agreement with Japanese telecommunications and software company Softbank whereby Softbank Group will acquire between 18 to 23 percent of Betfair. The parent company of Betfair, The Sporting Exchange Limited, will facilitate an offer to its shareholders for a minimum of 15 percent and a maximum of 20 percent of its fully-diluted share capital. The Sporting Exchange will then offer Softbank Group a further 3 percent of primary shares. Betfair's chairman Tim Bunting commented, "Softbank is the ideal strategic partner for Betfair's ambitious expansion plans. It has a hugely successful track record in a number of related areas, and we're looking forward to working together."
Softbank runs the Yahoo! broadband service in Japan, and in September 2005 it signed a deal with the lwate Prefecture Horse Racing Association that will allow it to become Japan's first company to offer betting online. Beginning in April 2006, Softbank will begin taking bets over the Internet on races at two courses in lwate Prefecture, which is about 250 miles north of Tokyo where Softbank is based. The company says that if the venture proves successful it will spread the service to other regional races.
Betex raises 12.5 million; Lists on London's AIM
Betex, a London-based Asian-facing betting company, has raised £12.5 million through its broker Cenkos by selling shares at 34p. As a result, the company's stock will move up to London's Alternative Investment Market from the Ofex. In addition to operating online betting site Betex.com, the company also co-manages two Chinese provincial lotteries and hopes to secure similar deals with other provinces this year. Betex first listed on Ofex at 17p in 2004; shares closed Friday at 43p.
ISWI Seeks Independent Director to Serve on Audit Committee
Ineractive Systems Worldwide, Inc (ISWI) has been notified by the NASDAQ Listing Qualifications Department that it no longer complies with NASDAQ's audit committee requirements following the death of independent director Frederic Kupersmith, who was also a member of the company's audit committee. Nasdaq rules require a company to have an audit committee of at least three independent directors, so NASDAQ will now broadcast an indicator over its market data dissemination network noting ISWI's non-compliance until it has regained compliance. The nominating committee of ISWI's board has begun a search to find two qualified individuals to server as directors of the company, at least one of whom will be independent and qualified to serve on the audit committee. The company expects to appoint this person and regain NASDAQ compliance by its annual meeting of stockholders on March 30th.
Reporting
Online gambling company Sportingbet Plc (SBT.L) has published its financial results for the second quarter and first half ended January 31, 2006, boasting a 62 percent operating profit in the second quarter to £34.8 million, which exceeded most analysts expectations of about £32 million. Pretax profits for the quarter increased 72 percent to £15.7 million compared to the corresponding period a year ago. For the first half of Sportingbet's fiscal year, the number of new real money customers is up 62 percent to 159,814, and the average daily rake at the company's Paradise Poker unit is up 107 percent to US$541,782.
Chairman Peter Dicks stated, "The benefits of the increased size of our business across our shared purse 'one-stop-shop' environment have again been demonstrated in this quarter. During the three months ended 31 January 2006 we have recruited more new customers, taken more bets, played more games of poker and made more profit than in any previous quarter in the Group's history. Our cash generation in the quarter has also been at record levels, and I am delighted to announced the payment of an interim dividend of 1.0p per ordinary share."
Sportingbet's share price fell slightly last week after Bonaire Investment Holdings reduced its stake to 9.4 percent by selling 17 million shares at 385p each. Bonaire's shareholding comes from the sale of its Paradise Poker Website to Sportingbet in October 2004.
Sportingbet Plc (SBT.L) - Interim Report
London-based Hilton Group Plc (HG.L) filed its last operating results report as a hotels and gaming business on Thursday. With the publication of its annual report, the sale of the company's hotels unit for £3.5 billion to its American sister company Hilton Hotels Corp became complete, leaving the remaining entity from Hilton Group to rename itself Ladbrokes Plc as it presumes the role of a pure betting business. The combined group's overall pre-tax profit rose to £394 million in 2005, up from £376 million in 2004, but the most striking figure is that operating profit from online gaming nearly doubled to £41.4 million.
Ladbrokes will reward shareholders with more than £4.2 billion in the second quarter, and CEO Chris Bell said the company will soon review its policy of not accepting online wagers from the U.S. The company also revealed that it has secured a consulting role for the launch of sports betting shops in the Beijing Province of China.
"China has the potential to be on of the biggest betting markets in the world," said Bell. "This demonstrates how well the brand travels. We're likely to announce another two or four (agreements) in the coming months and they'll all be in Asia or Europe."
Ladbrokes Plc (HG.L) - Annual Report
Last week Internet Bingo solutions company Parlay Entertainment Inc (PEI.TSX)(PRYNF.PK) released its financial results for the three-month and one-year periods ended December 31, 2005. Among the group's highlights for Q4 2005 are a new corporate record for revenue at US$1.8 million (79 percent better than Q4 2004 and 13 percent better than the previous record from Q3 2005) and a new corporate record for royalty revenue at $1.6 million (73 percent better than Q4 2004 and 10 percent better than prior record from Q3 2005). Parlay's yearly totals for revenue and royalty revenue were also corporate records, with revenue reaching $5.9 million (up 58 percent from 2004) and royalty revenue reaching $5.4 million (up 60 percent from 2004). Net income for the year reached $658,000, or $.05 per share, compared to a loss of $594,000 in 2004.
Parlay's president and CEO Scott White stated, "Fiscal 2005 was the year in which Parlay's financial results began to reflect our efforts over the past few years, as well as the tremendous interest in Internet bingo."
He continued, "Our first-mover deployment of a 90-number offering for the United Kingdom, Europe and Latin America has gained rapid marketplace acceptance. UK and European activity now represents approximately 40% of our revenue, compared to nil only 12 months ago. Over the last 12 months, our licensee, Bingos.co.uk, has become the most successful Internet bingo site, offering Internet bingo to players emanating from AOL (UK) Ltd., MSN UK and Lycos Europe. Our bingo network model, presently offered through St. Minver Limited and The Gaming Network Limited, offers media, gaming and retail brands, such as Virgin, Yahoo! UK & Ireland and Littlewoods Gaming, access to the soft-gaming market in a manner that no other Internet bingo software provider can. Over the last 12 months, we have helped position online bingo as the gaming alternative for the lucrative female audience that has thus far been underserved by the industry. We believe that substantial growth in online gaming will come from this audience in the years to come."
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Victoria-based gambling company Tattersall's Limited (TTS.ASX), which listed on the Australian Stock Exchange in July 2005, announced a net profit of AU$70.2 million for the six month period ended December 31, 2005. The company is well on track to achieve its 2006 prospectus profit forecast of AU$127.5 million. Revenue rose four percent compared the corresponding period a year ago to reach 1.3 billion. Tattersall's announced a maiden net interim dividend of AU$.0875 per share.
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First-half net profit for Australian media and gambling conglomerate Publishing and Broadcasting Ltd (PBL.ASX) rose 13.2 percent to AU$387.3 million, well ahead of market forecasts of AU$320 million. Crown and Burswood Casinos were some of the biggest earners for the company during the firm, while the Nine Network was one of its weaker businesses. The betting exchange operation of Betfair Australia, which began taking wagers on February 7th, is expected to help propel full year double-digit profit growth for PBL.
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Tabcorp Holdings Group Ltd (TAH.AX), Australia's largest gambling company, reported a 12.8 percent increase in net profit for the six month period ended December 31, 2005. The company also announced net profit of 292.4 million over the same period, an improvement from 259.2 million. The company expects to achieve earning per share growth in the neighborhood of 2 to 4 percent for the fiscal year ending June 2006. CEO Matthew Slatter says revenue in the first seven weeks of the second half is already up 5.3 percent.