iGaming
Latin America expansion proving fruitful for Gaming VC
A continued focus on its core brands coupled with an increasingly successful venture in Latin America has resulted in Gaming VC booking a modest increase in gaming revenue. James Walker reports.
CORPORATE
reported a 7.5 per cent increase in net gaming revenue during the first half of 2010 to 28.1m euro (£24.4m), indicating that the AIM-listed gaming giant’s strategy to invest in high- growth businesses is coming to fruition. The group - whose prin- cipal brands remain Casin- oClub, the online casino focused on German speak- ing markets; online sports- book Betaland; and Betboo, the online gaming platform for customers in Latin America - said monthly rev- enues had continued to increase throughout the course of 2010, but that its bottom line had been nega- tively impacted by several factors.
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The costly exceptional items, which amounted to 3.3m euro (£2.9m), were the group’s move from Luxem- bourg to the Isle of Man during the half-year, an ongoing court case over intellectual property rights with supplier Boss Media and a cancelled share option and long term invest- ment plan payments to executives. The restructuring
fter offloading its loss- making Winzingo busi- ness, Gaming VC has
process is being augmented by another re-domiciliation of one of its subsidiaries from Jersey to the Nether- lands Antilles to mitigate withholding tax on around 17m (£14.7m) euro of trapped reserves.
In line with analysts’ expectations, clean EBITDA from continuing operations totalled 6.6m euro (£5.7m) in the six months to July 30, down from 9m euro (£7.8m) in the prior-year period. Gaming VC said the reduc- tion reflects the planned investment in newer brands along with lower revenues and higher marketing costs in its core CasinoClub brand. Further exceptional costs relating to the group’s move to the Isle of Man and ongoing litigation against Boss Media amounted to 3.3m euro (£2.9m). Gaming revenues for CasinoClub totalled 15.1m euro (£13.1m), up 10.2 per cent on the 13.7m euro (£11.9m) in the first half of fiscal 2009, as the well established platform con- tinues to increase its share of the western European online gaming market. In addition to its core brand, Gaming VC’s atten- tion is firmly placed in high- growth Latin American
KENNETH ALEXANDER: ‘THE SOUTH AMERICAN BUSINESS CONTINUES TO ACCELERATE’
markets. The group has now owned the Betboo platform for a year and continues to see the number of cus- tomers increase, from around 1,400 active cus- tomers in January 2009 to around 4,200 in the current quarter.
Bingo remains the lead
product, generating over 80 per cent of the revenues and accounting for 50 per cent of the customers. However, Gaming VC said it believes the sportsbook offering will, over time, present a ‘better growth opportunity’. The sports risk-management operation of Betboo has now been transferred to the group’s risk-management hub in Malta and this is understood to have led to a significant improvement in sports margins. “The growth of the South American business contin- ues to accelerate,” said chief executive Kenneth Alexander. “Our strategy of continuing to pay out a divi- dend to shareholders of 75 per cent of the net cash gen- erated and investing in new high-growth businesses whilst continuing to aggres- sively defend our high- margin, highly cash generative CasinoClub business remains intact.” Casino VC’s two-pronged strategy of maintaining rev- enues and profitability in its German business while pur- suing growth in new markets is proving success- ful, and in addition to Latin America, Alexander said the company was looking to replicate the success it has had in Italy with Betaland in several new European markets. Jim Humberstone, ex head of sportsbook for Sportingbet, has been recruited in order to see this plan through.
Looking ahead, Casino VC said it would continue to invest in retention market- ing for CasinoClub, while also nurturing the Betaland brand. The group also said it would develop Betboo in both Latin America and other geographies, with a new sportsbook soon to be launched on the platform with four additional lan- guages.
10 BettingBusinessInteractive • OCTOBER 2010
Battle against UIG a blow in Washin
The Poker Players Association has been taking matters in trying to get the ban on online poker in the US overturned
AMERICA
he Washington State Supreme Court has dealt a blow to hopes that the UIGEA was on shaky legal ground by declaring that it does not violate the US Consti- tution. The case was brought to court by the Poker Players Association’s Lee Rousso, who argued that the government went against the commerce clause of the US Constitution when the UIGEA was introduced and that the ban on online gam- bling should be revoked.
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Rousso, who at one point last year was going to run for governor of Washington State, is particularly interested as playing online poker has been categorised as a Class C felony that is punishable by up to five years in prison and a fine of US$10,000 (£6,300). However, the Court has given the UIGEA a clean bill of health. It said: “Here, the leg- islature balanced public policy concerns and determined the interests of Washing- ton are best served by banning internet gambling. The legislature chose the advan- tages and disadvantages of a ban over the advantages and disadvantages of regula- tion. The evidence is not conclusive. Many may disagree with the outcome. But the court has no authority to replace the legis- lature’s choice with its own. Under the dormant commerce clause, the burden on interstate commerce is not ‘clearly exces-
sive’ in light of the state interests.” Chairman of the Poker Players Associa- tion and former US Senator Alfonse D’Amato commented: “We are extremely disappointed in the State Supreme Court’s ruling given the clear evidence that the state legislature never sought to regulate internet poker as it does in-state bricks and mortar card rooms and internet horse racing, but instead simply banned internet poker and, even worse, criminalised the players. This law is still a mistake, and we will continue to fight to have it overturned.” However, he did see some positives in the outcome. He said: “The one bright spot in the ruling is that the Court made it clear they weren’t endorsing the law, but rather endorsing the right of the legislature to pass the law. That underscores what we’ve heard time and again - that this law is ridicu- lous. In fact, earlier this year, a poll found that 80 percent of Washington voters oppose the law.”
Rousso has now pledged to take the issue further: “Unfortunately, the court has upheld an unpopular prohibition. Poker players in this state need to make their voices heard. Now more than ever we need to rally together to fight this outra- geous law. I hope the poker community will stand with me as I appeal this decision to the US Supreme Court.”
The USA is still providing a distraction
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