PartyGaming Interim Results Show Effects of the UIGEA

Published on: August 31, 2007 

A report detailing the interim results ending June 30 2007 was released by Popular Online Gaming operators,  Party Gaming.  The results of the last six months have clearly been effected by the passing the of the UIGEA (Unlawful Internet Gambling Enforcement Act) last October.  The following are some of the main points outlined in the report.  

For starters, the total revenue for this period was down by a pretty significant 68% (a total of 212.5 million compared with 661.9 million at this time last year).  The obvious reason for the decline here is due to the fact that PartyGaming could not accept business from any US player this year due to the UIGEA, and the US really did account for the majority of profits.  

And because of the fact that they can not accept US player transactions, admin expenses did go down this term (party due to the overall lower amount of transactions taking place).

One of the biggest impacts felt by PartyGaming after the UIGEA was passed was on their earnings before interest tax, depreciation and amortization (EBITDA) which amounted to 36.9 million for the six months in 2007.  A major decrease compared to the 360 million figure from 2006.  

The good news however, is that there has been a huge growth in business from non-US players (which is PartyGaming whole player community now).  Last year they saw 220,761 non-US players sign up with a PartyGaming brand, in the first 6 months of this year the number has almost doubled to 403,713 new real money players.

Furthermore, the 212.5 million in revenues so far this year has entirely amounted from non-US business.  The same revenue from this group of players last year was 42% lower at 149.8 million.  

So even though PartyGaming has strongly felt the effects of the UIGEA, things are looking up in regards to their growth within their non-US business and when the report was released, their stock (which took a major fall after the UIGEA) did see a minor boost.  

Here are a few other points of interest made in the report:

For PartyGaming, their poker division, PartyPoker still represents the largest portion (66%) of their revenues and account for 140.5 million.  

The Casino segment, which grew to nearly double, represented 64.6 million.

And the new sportsbook brands, Gamebookers and PartyBets amounted for 6.5 million in revenues.  

PartyGaming is actively pursuing a number of companies with which to form relationships and to increase their business. An example, Party Gaming recently formed  a three-year contract with 70 UK soccer clubs.

And finally, the report did mention that PartyGaming is still continuing with voluntary talks with US Attorney’s Office in New York.

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