Despite record results showing a 70 per cent rise in first-half operating profits to $237.7m on revenues up 81 per cent to $437.4m, the owner of internet poker company Party Poker stated there was a noticeable slowing of the growth previously seen in the poker sector, with retention rates and player yields declining faster than expected.
Chief Executive Richard Segal said the company will use its financial strength and strong market position to grow the business through further international expansion, the development of new gaming products and additional distribution channels.
During the first half, the proportion of real money sign-ups on Party Poker coming from countries outside the US increased from 10% to 19%. Revenue growth in the US year on year was 77% compared with 2004, whilst outside the US it was 110%. As a result, the percentage of total revenues generated outside the US in the first half was 14% compared with 12% in the previous year.
PartyGaming spent $52m on customer acquisition and retention costs during the period, a rise of 251%, with an average cost per acquisition of $286.
The company had 417,533 unique active players in June (15% outside the US), which was double that of the previous year.
But revenues per active player fell 7 per cent to $17.8, providing further evidence of the move to a more recreational user base.
“At this stage it\’s difficult to know whether the trends that we\’re seeing in active player days are a blip or part of a longer-term trend,” said the company\’s Finance Director Martin Weigold.
PartyGaming would not comment on a possible counter-bid for Empire Online, which received a preliminary offer from Sportingbet last week.
“We\’ve seen Sportingbet\’s announcement and we will monitor developments,” said Richard Segal.
In separate news, the company announced a deal that with Cellectivity to launch Starluck Casino Mobile, a new application that will allow customers to play games such as roulette and slots on mobile phones.
A mobile version of Party Poker is planned to be released in the near future.
Following the news, shares of PartyGaming fell 33 per cent, wiping about 2bn off the firm\’s value. Sportingbet, which is in merger talks with Empire Online, lost 16.2 per cent in spite of reassurances that it was trading as normal.
BetOnSports, fell 13.8 per cent, while ewallet providers NETeller and FireOne lost respectively 6.8 per cent and 11.4 per cent.
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