Online Gambling Companies Still Thrive Despite Deep Recession
The well-run online gambling firms continue to plug along despite a worldwide recession and unemployment rates in double digits throughout many countries including the United States.
European gaming interests release their financials quarterly. Ireland’s largest online wagering group (and the United Kingdom’s third largest), Paddy Power, reported staggering profit growth during the first half of this year. Its first half profits are up 50 percent from this time last year.
The company claims more than €11 million was bet on the FIFA World Cup this summer. It was also helped by its Australian subsidiaries. €205.6 million was won by its customers during the first part of 2010.
Under chief executive Patrick Kennedy leadership over the past two years, Paddy has opened up over a 100 shops in Great Britain while garnering plenty of free press from its rather unconventional marketing tactics like placing a betting stand outside the Vatican and offering odds on the next Pope.
As with the sector as a whole, Paddy Power said that the average bet stake decreased by 16 percent in the first half. This was offset by the increased volume of gamblers, however.
Similarly, Sportingbet.com announced strong numbers from the World Cup, which provides an added boost to the bookmakers revenue stream only every four years.
Sportingbet said it had taken over 50 million pounds ($78 million) worth of bets during the tournament.
"The strong World Cup performance underpins the fourth quarter trading results and the board remains confident that the group will meet management expectations for the financial year just ended," Sportingbet said earlier this month.
That company said that margins had been 17 per cent during the tournament and that full-year profits would be in line with expectations.
While the sports betting side has prospered, the online poker and casino sector continues to lag.
PartyGaming posted an overall profit of €19.7 million despite a drop of 9.6% in poker revenue. Sports betting through its PartyBets subsidiary climbed 89% to €10.2 million and bingo revenue soared from €1.2 million to €25.8 million.
888.com, which does not offer a sports betting platform, reported total operating income unchanged from the same period a year earlier at $61m.
Aaron Goldstein, Gambling911.com
