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Bwin Releases Disappointing Third Quarter Results

Internet gambling giant Bwin.Party Digital Entertainment has announced that it has released its latest financial results, noting a big 21% decrease in revenue.

Key financial indicators for the period ending September 2013 were:

  • Total revenue down 21% to €145.7 million (2012: €184.4 million), in-line with previously reported trading to 25 August 2013.

Casino financials for the quarter were:

  • ISP blocking saw the amount wagered on casino from Greek customers down 75% that contributed to a 16% decline in the total amount wagered in casino during the quarter to €1,650.3 million (2012: €1,957.8 million).

  • Average gross win margin declined to 3.8% (2012: 4.0%) reflected a shift in games mix towards table games

  • Average daily revenue was down 23% to €544,600 (2012: €708,700)

  • Number of unique active players down 34% year-on-year

Poker highlights were:

  • Net revenue fell by 37% year-on-year to €23.3 million (2012: €37.0 million)

  • The launch a new product into dotcom markets has begun to have a positive impact, the company said

  • Marked increase following new product launch in revenues from mobile and tablet devices

Bingo numbers for the quarter were:

  • Total revenue down 18% year-on-year to €12.2 million (2012: €14.8 million), the UK , its largest market, impacted by aggressive campaigns from competitors

  • Italian bingo business also impacted by aggressive campaigns from competitors as well as a 23% year-on-year decline in the overall market

  • Spanish bingo brand Binguez , delivered a 22% increase in revenue year-on-year although Spain remains small in the context of total bingo revenue. Average net daily revenues fell by 18% to €132,600 (2012: €160,900)

Sportsbetting results for the quarter included:

  • Sports betting revenues were down 10% versus the prior year to €52.9 million (2012: €58.7 million) reflecting the shift from ‘volume to value’ with the number of unique active players in the quarter down by 20%.

  • Sports betting wagers fell by 22% to €645.2 million (2012: €828.3 million), attributed to shift from ‘volume to value’ and ISP blocking in Greece where the amount wagered in September was down by 74% versus the prior year.

  • The gross win margin although up versus the prior year was slightly lower than expected at 9.1% (2012: 7.8%)

  • Average daily revenue in sports betting was down 10% year-on-year at €575,000 (2012: €638,000)

Commenting on his company's performance, Bwin CEO Norbert Teufelberger said: “As we expected, our underlying Q3 performance appears to have represented the floor in what has been a transitional year for the Group. Performance in the period was impacted by our shift from ‘volume to value’, continued declines in poker ahead of our dotcom relaunch, ISP blocking in Greece and a softer than expected sports margin in September."

“Whilst year-on-year comparisons for the current trading period are also impacted by the factors outlined above, average daily revenue for the six weeks to 11 November is up 18% versus the average for the previous quarter. All verticals have grown despite the continued impact of ISP blocking in Greece , although performance in sports was weaker than anticipated due to a softer than expected sports margin during the first three weeks of October."

“We have made excellent progress in respect of reducing our cost base. We now expect to exceed the €70 million target for 2013 that was communicated at the beginning of the year and this will help us to mitigate some of the impact from Greek ISP blocking which began during August."

“In the US , we received our transactional waiver from the Division of Gaming Enforcement in New Jersey on 8 November and are on-track to launch poker and casino as soon as we are cleared to do so."

"We remain excited about the opportunity to launch into New Jersey as soon as we are cleared to do so and while the potential size of the market remains unknown, we and our partner are determined to secure a meaningful market share."

"In Europe , we are focused on increasing our performance in nationally regulated and-to-be regulated markets, primarily driven by new product launches and an increased presence in mobile supported by targeted marketing campaigns."

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