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SPORTINGBET QUARTERLY PROFITS UP 143 PERCENT
The UK online gambling group Sportingbet reported a rise in Q3 operating profits of 143 percent this week, with company management confident of meeting full year expectations despite Turkish legal challenges and the international credit squeeze.
The company took the opportunity to update the market on the fate of two employees arrested last week in Turkey, confirming that they remain in custody with very little information flowing from the Turkish authorities. The group has
appointed lawyers to safeguard the interests of the two. The company continues to take Turkish bets.
CEO Andrew McIver commented that online gaming was apparently not specifically mentioned in Turkish court proceedings on the arrests, "...but we are none the wiser. It's had absolutely zero impact on our operations in the area. It's just unbelievably unfortunate for the employees in question.''
Group Q3 operating profit rose to GBP 7.3 million from GBP 3 million last time, and to GBP 19 million for the 9 month period to date compared with GBP 7 million last year. Revenues rose 25 percent to GBP 365 million in the three month Q3 period. Net income was GBP 3.4 million pounds in the three months through April, compared with a loss of GBP 62.4 million a year earlier.
The company statement reported that May's trading volumes have continued in line with recent trends in both Europe and Australia.
In Europe, sports margin has been below long term annual averages due to the run of sports results falling more in favour of the customer. In Australia, the business has experienced good betting volumes supported by a favourable sports margin.
The group said that it anticipates significant betting volumes from the Euro 2008 football championships but cautioned that the predictable nature of such tournaments can often result in low returns to the bookmaker.
Lost US business due to the UIGEA-enforced departure from that market has been largely offset by more business in Europe And Asia as the company builds on its objective of geographic diversification.
Third-quarter sports bets by European customers gained 27 percent to GBP198 million, the statement shows. Australian gamblers wagered GBP 152 million, up 26 percent. Betting on sports events constitutes nine-tenths of Sportingbet revenues.
UK online operators including Sportingbet, 888.com and PartyGaming plc began talks with the U.S. Department of Justice last year as concern spread about possible legal action against companies that took bets from Americans pre-UIGEA. McIver commented that nothing concrete has yet evolved, saying: "It's their timetable. Talks are very amicable and constructive, but where they might end up, I don't know.''
The US market constituted some 65 percent of Sportingbet's business when the company exited this market in late 2006, and this has influenced its strategy of diversification with a preferred goal of no more than 20 percent of business from any one country.
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