Bwin Party Records Profits but Not in Poker
After Bwin Party reviewed their quarterly profits at the end of the first quarter of 2012, Bwin Party saw a marginal increase of 1% in revenue compared to the first quarter of 2011. This meager 1%, accounts to about 215.9 million since first quarter of 2011 but it is hardly much of a noteworthy increase if you were to consider the bigger picture. However, sports betting had better luck with the opening quarter of the New Year with rise in revenue by 11% (€1.083 billion). Casinos and other online game options have seen an increase of 10% (€71 million). Nevertheless, Bwin Party saw falling revenues with online games like Bingo, which saw a sharp decline of 15% (€15.6 million). This trend does not stay with Bingo games alone. Poker too, Bwin Party claims has taken a beating with a 3% decline (52.2 million). Bwin Party has attributed the Bingo and Poker revenue drop due to stiff competition on the Italian shores and the closure of the Danish site.
Bwin Party’s recent report suggests that the site has seen a steady decline in players (15%) since last year. The company attributes this disturbing decline to their new marketing strategy adopted in 2011. The company’s move to focus on high value players from their usual high volume low value players has resulted in a €5.90 per day per player. Even though, this is about 11% increase in revenue; having depended on third party affiliates for the high value players; the company saw a decline in player traffic. Due to the declining number of players, Bwin Party realized that the increase in profits was only marginal.
Focusing on Bwin Party’s shares that are currently trading at 132.20p; a lower number compared to their 52 week high of 175.70p, but a higher number that their all-time 52 week low of 98.50p; one can determine that Bwin Party’s profits are still increasing marginally and holding. Their overall market capitalization stands tall at £1.11 billion – a great number as per Bwin Party’s statement.
While the company is not very happy with the first quarter’s turn out, they seem to be more optimistic as they strategize on plans for the remaining year. The company plans obtain a German online gambling license, which they predict will greatly help the falling revenue in Europe. One of their other strategies includes a launch of “download casino option” on the Bwin platform and proposed liquidity of their poker assets in the second half of the year.
A marked rise in profits with the start of the second quarter is something that falls in line with their year’s prediction. Although Bwin Party is part of the larger pool of online poker sites going through a lag phase with marginal profits and falling revenues, big sites like 888 are seeing better days, thanks to their aggressive marketing campaign. With the tough stance held by the US government, many big sites have shut down owing to new rules. However, several smaller sites remain open to traffic deflected by the Full Tilt and Absolute Poker sites closed since the Black Friday.
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