Party Gaming 2009 Revenue in Line with Management Expectations, by Dan Cypra - 18th December 2009

In a trading update released to the London Stock Exchange on Friday, Party Gaming, the parent company of PartyPoker, announced that its revenue was in line with Board expectations, while Clean EBITDA would likely surpass estimates.

Party Gaming is now anxiously awaiting legislative developments in three key markets: France, Italy, and the United States. On the latter country, which has been effectively shut off for the publicly traded company since 2006, the statement released by Party Gaming concludes, “Combining the strength of the PartyPoker brand with the trade and assets of the World Poker Tour that we acquired in November 2009, we believe we are well-positioned should the U.S. government elect to regulate online poker.”

As it stands now in the United States, the primary hope for legalization and regulation of the game is Congressman Barney Frank’s (D-MA) Internet Gambling Regulation, Consumer Protection, and Enforcement Act, HR 2267. The measure outlines a framework whereby licensed online gaming companies can solicit real money action from U.S. customers. A companion bill introduced by Congressman Jim McDermott (D-WA), HR 2268, taxes companies 2% of deposits and could raise as much as $40 billion in revenue over a ten-year period. HR 2267 boasts 63 co-sponsors, while HR 2268 has four.

Party Gaming’s attention seems to be focused squarely on poker given its recent acquisition of the World Poker Tour (WPT), a longtime industry staple. Party Gaming CEO Jim Ryan commented, "Returning poker to growth has been a key focus for us. We are pleased to see that the initiatives introduced throughout the year are now feeding through into both operational and financial performance with increased player numbers and average net daily revenues versus the previous quarter, despite continued competition from illegal U.S.-facing sites and the difficult macroeconomic climate.”

PartyPoker introduced its Monthly Million poker tournament earlier this year, a $640 buy-in event held on the first Sunday of every month. In December, PartyPoker member “ireadursoul” took down the Monthly Million to the tune of $200,000.

Also announced in Friday’s trading update was that Party Gaming had taken out a £35 million three-year loan to be applied towards mergers and acquisitions. Discussion of a possible merger between Party Gaming and bwin has dominated poker news headlines this week, although the company has not confirmed that any deal is imminent. bwin is also a publicly traded company and can be found on the Vienna Stock Exchange.

Shares of Party Gaming closed the week trading at 254 pence in London, down 4.6 pence on the day, or 1.8%. In the beginning of November, shares of Party Gaming’s stock (PRTY) had sunk as low as 214 pence before rebounding. In January, amid the worldwide economic doom and gloom, Party Gaming was fetching a lowly 157 pence a share.

Also helping to keep revenues afloat in recent months has been Party Gaming’s Bingo and Casino arms. PartyBingo’s business was boosted by the acquisition of Cashcade back in July, while a $5 million jackpot payout in the casino earlier this month drew a considerable amount of attention.

Ryan remained optimistic that a strong 2010 would be in store for the company’s investors: "Despite the challenges presented by the prevailing macroeconomic environment, we have not been distracted from the execution of our strategic plan. With the prospect of a number of new and large regulated markets in front of us, an expanding portfolio of B2B customers, and a return to growth in our core business, we remain confident about the Group's prospects."

Read the entire Party Gaming Trading Statement to the London Stock Exchange. (Credit: Poker News Daily)

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