Partygaming gamble pays off

24-08-2006

A drive to "aggressively" pursue online gambling outside the US has seen sales at web group Partygaming grow by 49 per cent in the three months to June 30th.

The dramatic upsurge in gambling on the Gibraltar-based company's website, which saw 14 million "active player days," resulted in poker net revenue averaging $2.7 million (£1.5 million) every day.

Mitch Garber, Partygaming's chief executive, said that the results had "exceeded expectations" before explaining that the development of new products, including the "completion of a single player account and shared purse", had combined well with the company's overseas expansion.

"I am particularly pleased by our continued international expansion with 46% of our new real money poker sign-ups and 24 per cent of our overall revenue in the quarter coming from outside the US," Mr Garber said.

"Continuing to drive international expansion remains a clear objective and over the coming months we aim to pursue the growth of our non-US business aggressively, particularly in Europe and South America, where we continue to see a number of attractive opportunities," he added.

Despite an impressive set of results, future prospects for Partygaming and other participants in the US internet gambling industry look troubled by widespread scrutiny planned by the department of justice.

Following the arrest of Betonsports chief executive David Carruthers and 12 others on racketeering and conspiracy charges earlier this week, federal prosecutors admitted planning a "series of actions" against other industry members engaged in illegal activities.

Negative publicity generated by this case could help the US Senate push through a bill banning gambling on the internet – a potentially disastrous piece of legislation for Partygaming, which in its second quarter relied on the US for 73 per cent of its poker revenue.

Following the announcement of today's results, Partygaming's shares on the London Stock Exchange rose by 2.01 per cent in early morning trading.


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