888 Slumps

Posted by Thomas O'Toole | Filed under Uk Consumer Gambling, UK

888 Holdings has reported a slump in pre-tax profits and has accordingly decided to forgo an interim dividend payment. The company also reported a 39 per cent drop in earnings before interest, tax, depreciation and amortisation to £12.6m. The company blamed the slump on seasonal softness in the online poker market, fluctuating currency exchange and the fact that the World Cup distracted many punters away from playing such things as online casinos. Online Poker revenue fell from $26.2m to $19.6m during the period under review, with Bingo generating $23.5m, and casino revenues increasing from $55.9m to $59.3m. Marketing expenditure increased to $48m, compared with $35m in the first half of 2009. Pre-tax profit fell 56 per cent to $4.3m, whilst earnings per share dropped from 2.3 cents in the comparable period in 2009 to just 0.8 cents. The big questions remain; is the decline in online poker seasonal and to what extent has the World Cup just simply masked what is actually long term structural decline? Is 888 really part of the so called consolidation process, when it has still not settled with the US Department of Justice? Could the likes of Ladbrokes and William Hill even afford to buy 888 should they so want to? And what of 888's marketing budget; is the 888 brand really strong enough to see it scaled back? A clear case of more questions that answers, despite the bests efforts of Mr Levy. 888 shares ended the day at 37p on six million shares traded.

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Discussion | Comments (144) | August, 31 2010

Swedish Law

bmnewlogo July 08 2010 saw the Court provide a ruling in Joined Cases C-447/08 and C-448/08, "REFERENCES for a preliminary ruling under Article 234 EC from the Svea hovrätt (Sweden), made by decisions of 8 October 2008, received at the Court on 13 October 2008, in criminal proceedings against Otto Sjöberg (C-447/08) and Anders Gerdin (C-448/08)." At the material time, Mr Sjöberg was the editor-in-chief and the publisher of the Expressen newspaper. In that capacity, he had sole responsibility for the publication by that newspaper, between November 2003 and August 2004, of advertisements for gambling organised abroad by the companies Expekt, Unibet, Ladbrokes and Centrebet. Mr Gerdin, for his part, was, at the material time, the editor-in-chief and publisher of the Aftonbladet newspaper. In that capacity, he had sole responsibility for the publication by that newspaper, between November 2003 and June 2004, of advertisements for gambling organised abroad by those companies. The Åklagaren (Public Prosecutor?s Office) subsequently took proceedings against Mr Sjöberg and Mr Gerdin for infringement of Paragraph 54(2) of the Loterrilagen, for having promoted, unlawfully and for profit, the participation of Swedish residents in gambling organised abroad. On 21 June and 6 September 2005, Mr Sjöberg and Mr Gerdin were each ordered by the Stockholms tingsrätt (District Court, Stockholm) to pay a criminal penalty of SEK 50 000 in respect of infringement of the Lotterilag. Mr Sjöberg and Mr Gerdin both appealed against the judgment concerning them before the Svea hovrätt (Court of Appeal)and the Svea hovrätt decided to stay the proceedings and to refer to the Court. The Court in this instance ruled that Article 49 EC must be interpreted as not precluding legislation of a Member State, such as that at issue in the main actions, which prohibits the advertising to residents of that State of gambling organised for the purposes of profit by private operators in other Member States. However, the Court also said that if it is ture that persons carrying out the promotion of gambling organised in Sweden without a licence incur penalties which are less strict than those imposed on the persons who advertise gambling organised in other Member States, then those arrangements are discriminatory and the provisions of Paragraph 54(2) of the Lotterilag are contrary to Article 49 EC and, consequently, unenforceable against the persons being prosecuted in the main actions; "Article 49 EC must be interpreted as precluding legislation of a Member State subjecting gambling to a system of exclusive rights, according to which the promotion of gambling organised in another Member State is subject to stricter penalties than the promotion of gambling operated on national territory without a licence. It is for the referring court to ascertain whether that is true of the national legislation at issue in the main actions."

 

Betting Europe

"Be careful what you wish for. You might just get it." Online bookmakers that have spent the past ten years campaigning for an open, liberalised European betting market, are finding the going tough in those markets that have already become partially liberalised. On Thursday 27 May 2010 Sportingbet said; "Legislation to issue license to permit online sports betting, online horse betting and poker for customers resident in France was adopted by the French Parliament on 6 April, 2010. Online casino and games of chance are not permitted. The law was enacted on 14 May 2010 and in compliance with the legislation the Group stopped taking wagers from French resident customers. The Board of Sportingbet hope the licensed market, with greater freedom to advertise, along with greater acceptance of the online gaming market will lead to market growth. Subject to concluding on the economic viability of operating under the new licensing and tax regime, the Group intends to apply for licenses to operate sports betting, pari-mutuel horse race betting, and poker. As the license issue process and the detailed regulations are only just being published, it is unlikely that the Group will be able to satisfy the French regulatory requirements until early in 2011. In the 9 month period to 30 April 2010, the Group earned a contribution of £2.6m from £6.0m of Gross Gaming Revenues ("GGR") derived from the Group's French language site. Approximately 60% of GGR was derived from sports betting, 15% from poker and 25% from casino. In total, GGR from France accounted for approximately 3.5% of Group GGR."

Europe Endless

HR 2267 Passed

Barney Frank's Online Gambling Bill, HR 2267 was debated by the House Financial Services Committee yesterday. The bill was passed (41-22) following several amendments. Despite the usual euphoria, it should be noted that it must pass the House of Representatives and the Senate before being passed into law. Whilst there have also been claims that the bill, if passed, could be transformational for UK listed online gambling operators, this is of course a nonsense as there is no clarity as regards whether they would even be allowed to apply for licences. Moreover, the scale and scope of the Vegas boys will enure that it is encumbents that will benefit from any liberalisation. One of the amendments to the Bill reads "fails to certify in writing, under penalty of perjury, that the applicant or other such person, and all affiliated business entities, has through its entire history:(i) not committed an intentional felony violation of Federal or State gambling laws; and (ii) has used due diligence to prevent any U.S. person from placing a bet on an internet site in violation of Federal or State gambling laws. All entities under common control shall be considered affiliated business entities for the purpose of this subparagraph.” Other amendments suggest that Sports betting will still be prohibited, minors will be protected, bets can only be made with pre paid or debit cards. The timing and outcome of the proposed changes are impossible to predict.

Italy

Online gambling revenue in the Italian betting market rose by 31.3% to €319.1 million in July compared with €242.9 million in the same period last year but decreased by 14% from the €371 million repoprted in June 2010. Online sports betting revenue rose 34.1% to €58.6 million in July from €43.7 million in the same period last year but decreased by 41.4% compared to €100.1 million in June 2010.

Essential Reads

Lead Articles

Regulators

Search for Liquidity

Further signs of the demise of the online poker segment comes with the announcement that Betfair Poker is joining Ongame Network’s online poker network at the end of July 2010; the effective end of Betfair's once lauded Poker’s standalone poker room. “This move is a conscious effort to place our poker players at the forefront of our product offering. Betfair Poker players will have access to more games, at all times of the day. Both companies are dedicated to the long term improvement to player experience. We look forward to a long and successful partnership with Ongame Network.” said Daniel Svard, Head of Betfair Poker. Those of us with long memories remember Betfair Poker as the home of the hush hush poker heist and of course, the voluble PokerQ; whose loquacious wit and banter, proved a little to hot to handle for the boys at Betfair; who in the process missed out on on one of the marketing opportunities of the century.

2010 Grand Prix de Paris


France Open

The newly liberalised French betting market is open for business, after the regulator Arjel granted seventeen licences, to comapnies including; French games (parionsweb.fr) and PMU (pmu.fr); Stephane Courbit received licences for two of his concerns, betclic.fr and Everest Gaming (poker), the Austrian operator Bwin, but also Xavier Niel, the founder of Free, with his Iliad Gaming outfit (chilipari.fr granted a licence in the field of sports betting). Marie-Odile Amaury (Éditions Philippe Amaury) was granted licences for her sajoo.fr venture (a joint-venture with Bwin which recently also formed an alliance with Boursorama the leading online financial services company.) (paris online poker and sports), as was Martin Bouygues for his eurosportbet.fr (paris online poker and sports). Arjel also granted licences to Beturf (leturf.fr), Table 14 (poker) and FrancePari. The second round of licences granted on 25 June went to; LIL Managers limited, owners of friendbet.fr (Paris sportifs mutuel); Reel Malta Limited, owners of pokerstars.fr (Jeux de cercle); Electraworks SAS owners of partybets.fr; gamebookers.fr (Paris sportifs cote fixe - mutuel); actpoker.fr; luckyjeux.fr (Jeux de cercle); Iliad Gaming SAS owner of chilipoker.fr (Jeux de cercle) and Partouche Gaming France SAS, owners of partouche.fr (Jeux de cercle.) Mangas chief executive Nicolas Beraud, is on the record as saying that the French betting market will not be profitable for two years due to the very high tax rates currently being imposed on egaming revenue. The former incumbent the PMU has reported a minimal increase in turnover to €4.7bn for the first half of 2010.

Machine

A cursory glance at Hansard suggests that the future of fixed odds betting terminals remains uncertain under the UK's current coalition government; "Mr Lammy: To ask the Secretary of State for Culture, Olympics, Media and Sport pursuant to the answer of 1 July 2010, Official Report on gambling, whether he discussed fixed odds betting terminals in High Street bookmakers when he met the Chair of the Responsible Gambling Strategy Board on 3 June 2010. John Penrose: A range of issues relating to the research, education and treatment of problem gambling in the UK were discussed at my meeting with Baroness Julia Neuberger. There was no formal agenda for the meeting, but I can confirm that a variety of gambling activities, including Fixed Odds Betting Terminals (FOBTs), were included within that general discussion." Bookmakers no longer enjoy the clout that they once did with the Tories, and it would be no surprise to see a new tax on machines.

Intelligence

Betex Expands.

Posted by Caillou on 13/07/10

Betex Group, the company that specialises in providing lottery management, technology and investment services to the Sports and Welfare Lottery Centres in China, has announced that it has been granted new licences by the Sports Lottery Management Centres (LMCs) in Tianjin, Jiangxi and Hunan. This development will allow the Company’s local subsidiaries to open a flagship Jing Cai store and 20 additional outlets within a two year period for each respective LMC. “Jing Cai” is a new single match football and basketball lottery product introduced by the Sports Lottery in the latter half of 2009. Betex said that it believes that, pending further regulatory changes, this deal offers it significant revenue potential particularly once the authorities introduce new Sports Lottery products that can be supported on the Jing Cai terminals. The Company said that its existing retail outlets in Guangzhou will also be upgraded to sell Jing Cai. In addition, Betex has said that it has also signed a co-operation agreement with the Guangxi Welfare LMC to jointly develop and submit for national regulatory approval new lottery technology concepts and products. The Company has also agreed to open a Welfare Lottery retail outlet in Nanning, the capital of Guangxi Province. Betex noted that this agreement builds on the Company’s recent entry into the Chinese Welfare Lottery sector, having earlier this year signed an exclusive five-year contract with the Nanjing Welfare LMC to launch and operate lottery kiosks across Nanjing, the capital of Jiangsu Province. CEO Jeremy Longley, commented: “These new agreements confirm our commitment to the lottery in China and demonstrate our ability to grow the business. We will continue to invest in our China operations and build on what we believe is a unique foothold in one of the most exciting and growing global lottery markets.”

Marc Faber's Book

Betfair and the Levy

Posted by Nosferatu on 07/07/10



In response to the Levy Board July 2010 announcement of a consultation on betting exchange customers, Betfair's Legal Director, Martin Cruddace, said; "We.re very surprised by the Levy Board.s announcement. This issue of whether betting exchange customers are acting as bookmakers has been the subject of debate since Betfair started. After a thorough, independent review of this very issue throughout 2004 and 2005, which took into account full representation from all stakeholders and other Government departments, the Treasury came to the conclusion that the treatment of betting exchanges and their customers was fair. Since then, there has not been one scrap of evidence produced by anyone to suggest the situation has changed. We are extremely interested to see if the Levy Board is able to run a fair and impartial consultation process bearing in mind that several of their directors have publicly stated positions that would seem to prejudge any outcome. We are also surprised that any consultation that singles out the customers of one class of operator could be considered fair or lawful where no such distinction is made in any part of the relevant legislation. Today.s announcement by the Levy Board, together with the statement from Nic Coward of the BHA, illustrates exactly why we have redirected our voluntary levy payment. We have not withdrawn this money from British Racing; we have withdrawn our donation to the Levy Board and BHA. We want to make sure that it is spent to deliver real benefits to the sport rather than being diluted by middlemen and the accompanying costs that cover their salaries, pensions contributions and the substantial legal bills incurred in a sustained and discriminatory attack on our business. We will be announcing some of the first investments we.re making shortly."

Taxing Questions

Bettingmarket.Com - Blind idealism is reactionary.