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Bwin.Party Pre Close Trading Update

Online poker and casino disappoint, but sports betting is better.
The European online gambling group Bwin.Party Digital Entertainment posted its pre-close trading update Monday, highlighting the following:
* Revenue performance in the three months to 30 June mixed with y-o-y growth in sports, but a soft performance in poker and casino, and bingo;
* Since the end of June, volumes and gross win margins from the FIFA World Cup have been strong and overall the tournament performance has been in-line with management’s expectations;
* Mobile/touch grew strongly and in the three months to 30 June 2014 represented approximately 35 percent of sports betting gross gaming revenue (Q2 2013: 21 percent) and 21 percent of gross gaming revenue overall (Q2 2013: 9 percent);
* Nationally regulated and/or taxed markets represented approximately 56 percent of total revenue in the second quarter of 2014 (Q2 2013: 52 percent);
* Several new product initiatives are now live including mobile products for sports betting, poker, casino and bingo;
* The Board expects to deliver additional cost savings in 2014 of Euro 10 million in addition to the Euro 20 million of cost savings that have already been announced;
* Further potential cost savings to be delivered in 2015 have been identified by management, details of which are expected to be announced with the half year results on 29 August 2014;
Norbert Teufelberger, CEO of, said:
“Trading in the second quarter was mixed with revenue a little softer than expected but Clean EBITDA margins were slightly better than expected.  While the decline in the dotcom poker market in the period also affected our casino business, the impact was mitigated by an uplift in player activity in sports betting in nationally regulated and/or taxed markets, largely driven by the FIFA World Cup.  The UK bingo market has remained highly competitive ahead of the introduction of a point of consumption tax later this year, but our Foxy Bingo brand has maintained a leadership position and our new mobile offering has been well received.
“As expected, the start-up losses in New Jersey, ISP blocking in Greece and the absence of domain sales in the first half have impacted both the revenue and Clean EBITDA performance versus the prior year.  However, we are taking steps to improve operating performance, simplify decision-making, reduce complexity and costs and, as a result, remain confident about the full year outlook.”
The Group’s results for the six months ended 30 June 2014 will be announced on 29 August 2014.

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