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Bwin Party issued its pre-close trading update

January 10, 2013 : BWIN.PARTY HOPES FOR A MORE LIBERAL GERMAN GAMBLING ENVIRONMENT
 
Latest trading update says the company is performing to expectations
 
Bwin.Party Digital Entertainment issued its pre-close trading update Wednesday, expressing the hope that the confusing German gambling law situation can be resolved and a more liberal regime established, and assuring investors that the company is performing to expectations.
 
Highlights of the update include:
 
* Trading since 30 September 2012 has been in-line with management’s expectations
* Continuing Clean EBITDA margin for the year ended 31 December 2012 expected to be between 19.5 percent and 20.5 percent
* Successful migration of bwin.com customers to a single technology platform. The remaining French and Italian migrations remain on track to complete in the first half of 2013.
* Italian slots launched on 3 December 2012
* Poker and casino licence awarded in Schleswig-Holstein
* On-track to deliver approximately Euro 65 million of synergies in 2013
* In Belgium, local partner Belcasinos is in the process of securing the requisite operating licences to operate all online products.
 
Since the end of September 2012 the group’s performance has been in-line with expectations, management reports.
 
Gross win margins in sports betting returned to more normalised levels in November after a strong run of results in October, although this is still well above last year, reflecting a shift towards longer odds and the partial recovery of the 5 percent turnover tax from German customers.
 
In poker, while a greater focus on player acquisition via direct channels rather than through affiliates may reduce new poker sign-ups and active player days going forward, it is not expected to materially affect revenue, but will improve the poker ecology within the PartyPoker network. The much-anticipated all new version of PartyPoker will probably launch during the first half of 2013.
 
On the online casino front, the company successfully launched slots to Italian customers on 3 December, and early performance has been encouraging. The online bingo business remained steady.
 
In its regulatory update, the company says there is now a question over how the existing regime in Schleswig-Holstein can co-exist with the alternative system proposed by the other 15 Länder that seeks to allow sports betting only and with significant additional restrictions for the online offer.... restrictions that do not apply to land-based operators.
 
"Despite the recent detailed opinions and the possible threat of a formal infringement procedure, Schleswig-Holstein may choose to press ahead with the revocation of its existing law and its accession to the framework proposed by the other 15 Länder," the update speculates.
 
"Whilst we welcome the move to regulate the online gaming market in Germany, this must be in a consistent and coherent manner in-line with EU law."



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