Belmont Stakes Delivers New Customers and Record Handle to Youbet.com
Youbet.com Inc. (UBET), the largest Internet provider of horseracing content in the United States, announced that its site experienced new record highs in a number of categories on the race day of the Belmont Stakes. A daily company record of 1,840 new customers registered for Youbet's services that day, marking a 185 percent increase over last year's Belmont Stakes day, when 645 new members signed up. Partly as a result of the new members, the company served a record number of concurrent users as the site experienced a 43 percent increase in concurrent customer utilization at peak periods on the afternoon of the race. Overall, the number of customers wagering this year was 25 percent higher than last year, and the company took a 32 percent increase in handle as customers wagered a race day record of $1.4 million.
CEO's Personal Conflict Costs William Hill £75 million
David Harding, CEO of William Hill Plc (WMH.L) sold 946,954 shares in the company Thursday, raising more than £5 million. Harding, who retains 50,000 shares, stated that he sold the stock for personal reasons. (Media sources report he is in the middle of a divorce.) Some analysts, however, were skeptical and took alarm. Brokers Seymour Pierce, for example, suggested that investors also sell company stock, supporting its advice with evidence that competition is increasing across all channels and will only get stiffer after Britain's new gambling legislation passes. On the other hand, William Hill's house broker, Citigroup Smith Barney, raised its new price target from 600 pence to 650 pence, arguing that if the current win rate continues for the rest of the year, the pre-tax earnings forecast would have to increase by 10 percent to £250 million. Citigroup also cited last year's 80 percent growth rate of the company's online business as support for its recommendation that investors buy shares in William Hill. Inevitably, Harding's stock sale resulted in a £75 million (3.3 percent) drop in the company's value. The company announced a company share buyback program on Friday to steady shares at 538 pence.
Vegas Casinos on Hot Streak
Nevada's casino industry continues to post increasing profits. In April, the state's 349 casinos collectively reported gaming win that had increased by 11 percent, or $82.3 million, as compared to the same month last year. This April was the industry's best ever as it posted wins totaling $826.9 million. The industry experienced its best single month ever in March 2004, raking in $930.3 million to surpass the three-year-old record $899.l8 million in January 2001. The $875.9 million win in February was also an all-time high for that month.
Investors React to More Cautious, Incremental Approach
Gaming and leisure stocks fell in Britain yesterday as investors feared that a "more cautious, incremental approach" to gambling legislation will lead to tighter restrictions. Stanley Leisure Organization Plc's (SLY.L) shares fell 30.5 pence, or 5.7 percent, to 449.5 pence on the day while The Rank Group Plc (RNK.L)'s shares dropped 18.75 pence, or 4 percent, to 286 pence. Shares in Hilton Group Plc (HG.L), parent company of Ladbrokes, also slipped 1.5 percent to close at 261 yesterday, while William Hill's shares fell 1.5 percent.