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"Were going for a higher quality of person, and the net gaming revenue per active casino member is well up," explains CEO on drop in number of players.
Share prices at 888 Holdings, which were showing signs of recovery after last week's stock exchange bloodbath in the wake of the BetonSports affair (see previous InfoPowa reports) took another 6 percent drop on the release of second quarter performance numbers that did not come up to expectations.
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e online casino and poker company reported that sales rose 23 percent in the second quarter but nevertheless fell short of expectations. Chief Executive John Anderson said revenues had been hit by the traditional sector slowdown each second quarter and by the World Cup this year, which dragged customers away from their computers to watch televised football matches.
888 shares fell 11 percent in early trade and by late morning Tuesday were 6.2 percent weaker at 148 pence, valuing the business at around GBP 564 million.
Anderson said he was not concerned by a 9 percent drop in the number of players in the second quarter to 281 402.
"Were going for a higher quality of person, and the net gaming revenue per active casino member is well up. Its $628 (GBP 339) instead of $554 in the first quarter, so Im happy with that," he said.
But Investec analyst Matthew Gerard said revenues from both poker and casino had fallen short of his expectations.
"We remain concerned over the business model and risk profile as 888 drives a higher yield per player from a smaller active player base," he said.
888 owns 888.com, Pacific Poker, Casino-on-Net and Reef Club Casino, and released numbers that still looked positive to most observers; its casino revenues rose 9 percent year-on-year to $45 million, while poker revenues climbed 48 percent to $35 million.
48 percent of 888s gaming deposits came from outside the United States.
"We think this is a key attraction especially given the recent Department of Justice action," analysts opined, referring to the U.S. arrest of David Carruthers, former chief executive of online gaming rival BetonSports, and the desirability of diversification into other geographic markets free of legal problems.
Anderson again hinted at the possibility of 888 acquiring a non-U.S. facing sportsbook, saying that current low share prices in the sector could present good opportunities to buy an Internet bookmaker that is not involved in taking bets from the United States.
"I want a sports book, funnily enough, but it will be a sports book that doesnt take bets from America," said Anderson. "I need it as a retention tool."
"The guy who plays poker with us on a Sunday afternoon, also wants to put a bet on Manchester United versus Everton on a Monday night, and at the moment we cant give him that, so he leaves us and goes somewhere else," he said.
"So I need to give him that offer," he added.
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