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Bwin financials reveal heavy competition in poker sector

The Q1/2010 results from Vienna-listed online gambling giant Bwin this week illustrated the value that the online poker activities of recent acquisition Gioco Digitale brings to the group.

If the Gioco contribution is separated from the general poker results, Bwin poker revenues fell 17.3% to €25.8 million, compared to quarter one 2009. The decline is attributed to the stiff competition from giant online poker sites like Pokerstars and Full Tilt Poker, which continue to service buoyant US market demand from which Bwin is excluded.

However, adding in the Gioco Digitale results brings first quarter gross poker revenues up 22.4% to €38.1 million from €31.1 million a year earlier.

Net poker revenues grew by a modest 1.4% to €26.6 million while the number of active customers soared 40% to 565,270 from 403,767 in the same period of 2009.

Bwin fared better in its other activities, recording Q1/2010 revenue growth up 13%, online casino activities contributing an additional 10% and general gaming up a stunning 82%.

Management reported that the heavy marketing and US action of its competitors in the US poker market is "distorting" the market, generating economies of scale both financially and in terms of player liquidities for companies like Pokerstars and Full Tilt.

This opinion has been previously expressed by rival Party Poker, whose chief exec recently attributed at least part of an 11% poker decline to the same causes.

Business highlights in the quarter included:

  • Record turnover for sports betting underlines market leadership
  • Bwin well positioned to seize opportunity resulting from Soccer World Cup, the opening-up of French market and additional product launches in Italy
  • Gross gaming revenues of €133.2 million were posted for Q1/2010, up 13.2% on Q1/2009, which did not include Gioco Digitale, acquired late 2009. The sports betting margin came in at 7.5% (Q1,2009: 8.2%)
  • Net gaming revenues of €109.2 million (€100.7 million excluding Gioco Digitale (Q1,2009: EUR 102.1 million)
  • Adjusted EBITDA declined 15.8% to €30.3 million (Q1,2009: EUR 36.0 million)
  • Result after tax was €17.6 million (Q1,2009: EUR 18.9 million)

Management remains optimistic that a significant increase in both gross gaming revenues and profit will be achieved for the year 2010. April 2010 daily gross gaming revenues have increased by 20.6% to €1.34 million or by 6.7% compared to the same period the previous year.

Source: InfoPowa News

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