PartyGaming, the operator of the world’s biggest poker website, increased revenues outside the United States by 151 per cent over the first half as legal uncertainties over online gaming contined to cast a pall over the industry.
But its shares fell more than 8 per cent as as healthy set of halfway figures were obscured by the detention in the US of Peter Dicks, the chairman of smaller online gaming firm Sportingbet.
As it pushed up pre-tax profits during the six months to the end of June by 47 per cent to $380 million thanks to strong growth in its internet casinos, PartyGaming made it clear that its priority was decreasing its exposure to the US market.
It gave warning that the lack of lack of clarity over the legality or otherwise of onling gaming in the US could persist for years to come.
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Non-US revenues rose for PartyGaming to $149.8 million against a group revenues increase in the first half of 51 per cent to $661.9 million.
Its poker sites generated revenues of $502.7 million, while the recently launched casinos brought in $159.2 million.
The number of customers being signed to its sites rose by 19 per cent to 519,532. Some 42 per cent of sign-ups in the second quarter were outside the US.
During this time fresh uncertainty was cast over the gaming world after the chief executive of Betonsports, a UK sports-betting service was arrested in Texas and charged with alleged fraud and racketeering. A Bill also passed the House of Representatives that, if approved later by the Senate, would tighten the laws on betting in the US.
“The board believes that a proper regulatory framework, like that being developed in the UK, is the most sensible way forward but also that the regulatory position in a number of countries is likely to remain unclear for many months and possibly years to come,” PartyGaming said.
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Richard Hunter, the head of UK Equities at Hargreaves Lansdown, the stockbroker, said: “The story remains the same - exponential growth in income but the shares overshadowed by the threat of the US regulatory position, worsened yet again today by the Sportingbet announcement.
“Unfortunately, until such time as the situation becomes clearer, the perceived worry will be a drag on the shares.”
PartyGaming, led by new chief executive Mitch Garber, also vowed to remain at the forefront of consolidation in the fragmented online gambling scene. Having only gained its stock market listing last year, PartyGaming has already made two acquisitions - EmpirePoker.com and Gamebookers.
“The online gaming market remains highly competitive but also highly fragmented with over 2,500 gaming sites currently available. The board intends to be opportunistic regarding mergers and acquisitions where it believes that a transaction can both enhance the overall balance of the group’s business more effectively than through organic investment, as well as deliver superior long-term returns for shareholders,” PartyGaming said.
This came as Sportinget, the UK-listed gambling group said it was in discussions with World Gaming to offer its smaller quoted rival 104p a share. Sportingbet is worth just over £1 billion and its potential offer values World Gaming at £57.6 million.
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PartyGaming shares closed last night at 117.25p giving it a market value of just under £4.7 billion.
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