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888.com Increases Profits Despite Uigea
34 percent lift in pre-tax profits from
Gibraltar-based group
The Gibraltar-based 888.com gambling group has shown investors
just how resilient it is with a set of results that includes a 34
percent increase in year pre tax profit and first-quarter revenues
that are 16 percent ahead of the preceding quarter. And all despite
the depredations of last year's Unlawful Internet Gambling Enforcement
Act which caused the group to exit the US market.
Profit before tax was $90.5 million (GBP 45.4 million) in year
2006, compared with $67.4 million a year earlier, and the company
reports overcoming a 55 percent drop in revenues after the US banned
internet gambling late last year to post full year pre-tax profits
up by more than a third. Net gaming revenues for the period rose
7 percent to $289.9 million.
However, it is thought that a potential deal to sell 888.com to
betting group Ladbrokes (see previous InfoPowa report) was halted
due to complications over the US law change, with Ladbrokes said
to be looking at ways to cap any liability in the US which could
arise from a takeover of 888 as America continues its online gaming
crackdown.
The two firms said last week they were no longer in talks, but
remained tight-lipped over the nature of the deal, saying only that
they had been in discussions about “a business transaction”.
888.com CEO Gigi Levy said that after his company ended talks with
Ladbrokes last week its focus was now on being a predator rather
than prey. "We don't look at ourselves as anybody's lunch,"
he told Reuters. "With that very fast Q1 growth we should be
growing ourselves and acquiring other companies."
"We're looking at a number of things," he added. "It's
probably going to be where our core business is, which today is
the UK and Europe."
Levy said he saw huge growth opportunities for the online bingo
business that 888 bought from Globalcom for up to $43 million last
month. "Bingo is a late bloomer in online gaming," he
said. "This is predominantly women and a whole different segment
that most online gaming companies do not address."
"Bingo is huge in central Europe and Latin America. There's
huge growth opportunity that nobody's tapped yet - Bingo will not
stay in the UK."
Asked whether expansion into Spain was on the agenda, Levy said:
"That's one of the first places we're looking at.
On this morning's (Monday) share prices 888.com is currently valued
at GBP 423 million.
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