b.win profits flat in weak poker environment

Online gambling firm bwin.party said profits were steady in the first quarter of 2012 but it had been hit by weakness in its poker and bingo markets.

Total revenue at the firm was up 1% to €215.9m with strong growth in casino operations and other games, - up 10% - offset by a softer gross win margin in sports betting.

The poker market remained challenging across Europe, b.win said, with revenue down 3% to €52.2 after a drop in average daily players of 15%.

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The firm said this was partly due to moving marketing activities away from high volume but low value players, to higher value gamblers in 2011.

This had resulted in an improvement in player quality, it said, reflected by an 11% increase in yield per active player day to €5.9.

But the subsequent fall in the total number of people playing meant this increase was not enough to boost average daily revenue, which fell by 4% compared to the previous year.

The company was also hit by a 15% drop in bingo revenue, which it put down to a loss of market share in Italy in 2011 as new entrants launched and eroded our first mover advantage, as well as cannibalisation from the launch of its own casino there.

The closure of its bingo in Denmark also hit the firm's numbers.

b.win's co-Chief Executives said in a statement that the firm was on-track to realise the €65m of merger synergies as planned and these would help to mitigate the impact of additional gaming taxes as well as the current macroeconomic challenges faced by a number of the European economies.

"With the imminent launch of our download casino product on the bwin platform, the Euro 2012 football tournament starting next month and the integration of our poker liquidity in the second half, we remain confident about the group's full year prospects," they said.

The company said trading since the end of March had been broadly in line with expectations with overall revenue showing the same seasonal decline it had seen in previous years, but with poker slightly weaker than expected.

Average daily gross revenue in April (excluding other revenue) totalled €2.69m, a 7% decrease over the previous quarter in line with the same period last year.