Lottomatica Obtains 63 Percent of Global Lottery Market
Now that it has purchased GTECH Holdings Corp. (GTK) through a deal valued at about US$4.83 billion, Italian lotteries company Lottomatica SpA (LTO.MI) will improve its share of the international lottery market from 14 percent to 63 percent. The company's largest competitor, U.S.-based Scientific Games Corp., possesses about 13 percent of the global lottery market. The merging of GTECH and Lottomatica is not expected to draw any antitrust action because it will not result in significant changes to market shares in any individual country.
ukbetting Meets Expectations for 2005
British online gaming group ukbetting Plc (UKB.L) issued a trading statement last week to report that trading for the year 2005 is line with market expectations. Revenue improved over the previous year by 38 percent while gross win remained constant at 11.2 percent despite the run of poor sporting results experienced in the second half. Revenue from casino gaming grew 65 percent and revenue from poker grew by 78 percent. Ukbetting now has more than 332,000 gaming customers—26 percent more than at the end of 2004.
In addition to its gaming and betting operations, ukbetting also runs a network of sports content sites that serves to earn revenue through consumer advertising and to drive customers to the gambling websites. Monthly users for the content network were up 20 percent over 2004 to 8.5 million. Consumer advertising in the content network rose nine percent over 2004. ukbetting says it has seen marked improvement in the number of customers driven to its gambling sites and the revenue per user since it ceased displaying advertisements for competitors on its sites. The company is now in the process of rebuilding its main sites—sportinglife.com, football365.com, rivals.net and teamtalk.com—to enable video content and create further advertising opportunities for its clients.
Ukbetting recently renewed a contract to continue using CryptoLogic's Internet poker solution through 2009 and its casino solution through 2008.
Leisure & Gaming to Report $7.1 million in Profit for 2005
Online gaming company Leisure & Gaming (LNG.L), which acquired Curacao-based VIP Management Services through a reverse takeover in June 2005, issued a pre-close statement last week in advance of its financial report for the year ended December 31, 2005. Leisure & Gaming expects to report an adjusted profit before tax of about US$7.1 million on a pro forma full year basis. The company says its sports margins have improved upon last year despite a stretch where several favored teams won NFL games in November and December. The casino gaming business has also improved in both activity and revenues, and new customer sign-ups have been strong across the group. Leisure & Gaming's integration of recently acquired Nine.com and English Harbour are proceeding according to plan, and the company's profit estimation includes a contribution from them for the final three weeks of the year.
Sportech CEO Shuffles Board
Ian Penrose, the new CEO of Sportech (SPO.L) who was hired three months ago, has shaken up the company's board. Piers Pottinger, who is executive deputy chairman of Chime Communications and a non-executive director of Northern Racing, will replace David Mathewson as non-executive chairman. Sportech's finance director Gary Speakman will take responsibility for the newly created position of chief operating officer and will continue his role as finance director until a replacement is found. CEO Penrose explained, "I'm bringing in people with proven experience in the areas we need." Earlier this month Sportech terminated a seven-year contract with ITV because it was "commercially unviable." For ending the partnership Sportech will have to pay ITV an estimated £14 million over the final three years of the contract.
Australian Gaming Market Forecast
A recent briefing note to clients from brokerage firm Goldman Sachs JBWere predicts a difficult 2006 for the Australian gaming industry. It states, "We have for some time struggled with the general outlook for the gaming sector and we see little happening in 2006 to make us reconsider our views." The major complication-- smoking bans in New South Wales, Queensland and Victoria-- will affect only the land-based aspects of businesses, particularly those of Tabcorp Holdings (TAH.AX). Tabcorp will also have to deal with a Tattersall's Limited (TTS.ASX) that is becoming more competitive in addition to the dispute between Tabcorp subsidiary Sky Channel and ThoroughVision over the broadcast rights for thoroughbred racing. Another obstacle for Australian companies is the licensing of British betting exchange Betfair in Tasmania to operate a site that will compete with the TAB's and other online betting operators. The one Australian company to gain a favorable evaluation in the report was Publishing and Broadcasting Ltd. The company, which is a joint venture partner of Betfair, is expected to see its investments in Internet, pay television, Asian gaming and betting exchanges drive strong earnings growth.