Struggling UK-listed online gambling operator Bwin.party digital entertainment eked out a small revenue gain in Q3, with FIFA World Cup wagering helping to offset continued declines in its poker and casino verticals. On Thursday, Bwin.party released its Q3 interim statement and key performance indicators, showing a 2% rise in revenue to €148.7m, thanks mainly to its sportsbook, which saw revenue rise 11% to €58.8m.
Bwin.party’s sportsbook benefited not only from the second half of the World Cup but also from a 1.5 point year-on-year improvement in hold percentage. The company says its new Combi+ pre-packaged customer-tailored accumulator offering is proving popular and is being rolled out across Bwin.party’s key markets.
Revenue from Bwin.party’s ‘other’ vertical, which includes the Kalixa payment services division, the World Poker Tour and network services, shot up 64% to €11.8m. The rest of Bwin.party’s picture is far less pretty, with casino revenue down 3% to €48.5m and bingo down 1% to €12.1m.
But poker’s decline raised the most eyebrows, falling a whopping 25% to €17.5m, representing just 12% of group revenue. The company claims the poker vertical has improved since the end of July and CFO Martin Weigold told analysts that while the company hadn’t “given up” on poker. Nonetheless, Weigold expects the vertical to fall a further 25% in 2015. Contributing to this slide will be new French laws applying VAT to poker revenue as of Jan. 1, 2015, which the company expects will reduce poker revenue by €500k per year.
Mobile accounted for 23% of Bwin.party’s overall Q3 gaming revenue but just 7% of poker revenue in the month September. While that’s significantly better than the 3% in the same month last year, it’s still a pale shadow of mobile usage among Bwin.party’s peers.
Key performance indicators were largely grim. Yield per active player per day rose 11% year-on-year but daily average players and active player days both fell 11%, real money sign-ups fell 13% and average net daily revenue fell 1%. Stripping aside the company’s ‘other’ revenue vertical, actual gaming revenue fell 1% to €136.9m. Focusing on the bright side, Bwin.party notes that if it hadn’t been forced to exit the Greek market, gaming revenue would have risen 1%.
Bwin.party CEO Norbert Teufelberger (pictured) said the company was “re-sizing’ its operations in New Jersey’s regulated online gambling market. While the Bwin.party/Borgata pairing is the state’s undisputed revenue leader, Teufelberger had expected the overall market to be “substantially bigger” and thus the company would reduce its marketing budget accordingly.
As a certain eGaming Review scribe (@Poker_Hack) tweeted, “Bwin.party results today are positive in the same way it’s positive when your puppy only shits in the kitchen rather than on the carpet.” Bwin.party shares closed at 88.1p on Thursday, up 5.5p on the day. However, investor exuberance may be short-lived when they realize that the day’s gains amounted to a 6.66% increase, which might convince Bwin.party’s more devout shareholders that Teufelberger really is the Antichrist, putting them in a unique ‘sell or hell’ conundrum.
