Poker News

PartyGaming signs with Danske Spil to provide online gaming in Denmark

More positive news for online poker in Europe: Denmark's state-operated Danske Spil has signed a five-year agreement with PartyGaming, which will use its expertise and know-how to offer online gaming to the Danish market.

Denmark's relationship with gaming, particularly online gaming, has been patchy through the years. While live poker tournaments were considered perfectly legal, online poker was frowned upon by the Danish Supreme Court until very recently. The Danish gaming system, Danske Spil, enjoyed a lengthy virtual monopoly while all foreign gaming companies were forbidden to enter the Danish market for most of this decade, which sparked a number of disagreements with the European Commission regarding free trade agreements within the European Union.

In 2009, Denmark finally relented and put forth a draft legislation to partially open the Danish poker and casino market, which is expected to pass as law in 2011. Denmark further showed its commitment by allowing Danish people access to Hollywood Poker's online gaming facilities. Now in early 2010, the state's former monopoly, Danske Spil, is partnering with one of the world's largest online gaming providers to prepare for the upcoming competition.

The partnership between Danske Spil and PartyGaming has everything needed to make it successful: while the Danske Spil group is one of the largest in Europe, with over 500,000 registered customers and a reported turnover of €1.47 billion (about $2.13 billion) in 2008, PartyGaming bills itself as " the world’s leading listed online gaming company" thanks to its very successful brands that include PartyPoker, PartyCasino, and PartyBets.

Jim Ryan, Chief Executive Officer of PartyGaming, was understandably glad to announce this new partnership:

This is a landmark B2B deal for PartyGaming and validates our strategy to become a leading provider of B2B services to both corporates and governments around the world.  Danske Spil is widely recognised as one of Europe’s leading gambling businesses, one that is pre-eminent in the Danish market.  We are delighted that Danske Spil has recognised our expertise and high standards of business practice and we look forward to building a significant and profitable enterprise as soon as the newly regulated Danish online gaming market opens.

Ryan has every right to be delighted. Danske Spil researched the market for seven months to find a partner that met its exacting standards for security, ethics, and, of course, quality. Their choice of PartyGaming is an endorsement of the highest possible level of the company's expertise and capability.

H.C. Madsen, CEO of Danske Spil, said of this new partnership:

With some of the world’s leading products in online poker and casino as well as a large international customer base, PartyGaming is definitely a strong business partner for Danske Spil. Combining this with Danske Spil’s unique and strong position in the Danish market with more than 500,000 Danish online customers will guarantee that together we will deliver a highly attractive customer experience to players in Denmark.

One issue that remains to be clarified is how the notoriously strict Danish taxation system will treat new gaming providers as they enter the market. Taxes on poker winnings are remarkably high on Denmark. For example, 2008 World Series of Poker (WSOP) Main Event champion Peter Eastgate could only spend $2.5 million out of the $9.1 million he won with his bracelet, the rest going to the government's arks. Companies willing to offer online poker will have to jump through hoops to be on the government's exclusive no-tax list, meaning that players will not be taxed over their winnings on those sites. Hollywood Poker currently enjoys no-tax status and it is to be expected that Danske Spil's upcoming online poker venture will enjoy it too.

PartyGaming's shares (LSE: PRTY) last traded at 279.3 pence per share in London today.

GigaMedia Announces Quarterly Reports, Details on Everest Poker Sale

Fresh off the announcement of its partial sale of Everest Poker earlier this month, GigaMedia announced its second and third quarter 2009 financial results. In addition, the company provided insight into the sale.

During a recent investors’ conference call, many of the major players in GigaMedia were present to offer information on the company's second and third quarter financial results. Most of the thoughts of those gathered were focused on the sale of 60% of Everest Poker, the popular online poker room that is currently the on-felt sponsor of the World Series of Poker (WSOP). Arthur Wang, Chief Executive Officer of GigaMedia, stated he was there to present the overview of “where the company is and where it is going,” but first stepped up to offer reasons for the sale of Everest Poker.

“About one year ago, we began a strategic review of this business unit, an evaluation of where the market was moving and where we were positioned in relation to such movements,” Wang stated. “We determined that, despite our rapid growth and position as the fourth largest poker site in the world, a strategic move was necessary.”

Wang then ticked off a list of reasons for the divesture of a majority ownership of Everest Poker to Mangas Gaming. He cited current trends in the regulation of online gaming in Europe, where individual nations are setting up their own regulatory rules, which Wang stated is “limiting player pools to single country players and requiring heavy in-country investments in infrastructure and personnel.” This type of regulation, Wang noted, challenges the ability of a company such as GigaMedia to run an operation that encompasses the entirety of Europe.

Wang next said that the necessity to have an all-purpose operation - to not just offer online poker, but also the full range of products such as a casino, sports book, and other gaming outlets - was another reason behind the sale. Mangas Gaming, through its majority ownership, will be able to provide those operations. Finally, Wang stated that the continued presence of “poker competitors operating illegally in the United States” and the hundreds of millions they earn continued to hamper those companies that operate exclusively in Europe.

With the discussion of the partial sale of Everest Poker to Mangas Gaming complete, the presentation of the second and third quarter 2009 fiscal reports was made. Quincy Tang, Chief Financial Officer of GigaMedia Limited, presented a report that showed a drop in performance over the second and third quarters of 2009.

The consolidated results of both quarters was “worse than expected,” according to Tang. “Second and third quarter revenues were $37.7 million and $37.2 million, respectively; second quarter net income of $128 thousand and third quarter net loss of $2.4 million,” he said. Some of the reasons for the decline were attributed to the continued global economic downturn and its effects on player spending and the competitive nature of the industry, including the challenges faced from those companies that accept American action.

The partial sale of Everest Poker to Mangas Gaming will give GigaMedia an influx of $100 million early in 2010. After the deal was announced, GigaMedia stock rose to $4.24 on the NASDAQ exchange, where it can be found under the acronym “GIGM.” At the close of business for the Christmas holiday, GigaMediastock was trading at just $3.18, near the bottom of its 52-week range.

Everest Poker Acquired by Mangas Gaming

While rumors are flying left and right about potential buyouts and mergers in the European online gaming market, news broke that Everest Poker and Mangas Gaming will join forces.  Mangas plans to buy out Everest in early 2010 as part of a deal worth in excess of $100 million.

The deal will be finalized in the first quarter of 2010.  Mangas Gaming will pay $100 million to Everest’s parent company, GigaMedia, in exchange for 60% of the shares of the company.  A Dow Jones article also stated that the final portion of the deal would be paid out after the company’s fair market value is reassessed in 2012.  There is also an option that allows GigaMedia to buy back Everest Gaming in 2013 should it see fit to do so.  GigaMedia is a publicly traded company on NASDAQ Stock Exchange, where it can be found under the symbol “GIGM.”

While the name Mangas may not sound familiar, the sites it owns and operates are well-known within the online gaming market: BetClic, Expekt Poker, and Bet-At-Home.  The French-based company appears to be taking more interest in poker as of late.  In addition to brokering the Everest deal, the company also signed World Series of Poker (WSOP) bracelet winner Scotty Nguyen as an Expekt spokesman earlier this year and debuted former Team PokerStars Pro Isabelle Mercier as a BetClic spokeswoman at the Doyle Brunson Five Diamond World Poker Classic at the Bellagio.

The increased efforts of Everest Poker to heighten its profile in the French marketplace make even more sense in light of this deal.  The company, which is the official on-felt sponsor of the WSOP, signed a deal with November Nine member Antoine Saout after he made the Main Event final table and added Fabrice Soulier to its roster of pros last month.

Mangas Gamings Chief Executive Officer Isabelle Parize commented on the deal in an official press release announcing the acquisition: “We are very proud that Everest is joining our group.  It is a great company; it is a brand with an outstanding awareness in the world of poker, well-known for its know-how, its platform reliability, and its strict policies. Mangas Gaming is reinforcing its position as a major European player in both the online poker and sports betting markets.”

GigaMedia’s CEO, Arthur Wang, expressed similar sentiments in his statement.  “We were looking for a reference partner with complementary activities to ours,” Wang explained.  “Our strategy is to participate in the growth of this innovative and dynamic industry in Europe. We are glad to do it alongside the French leading sports betting and online gaming group.”

Poker News Daily has learned that once the deal is complete, players on Mangas’ other online poker rooms will be shifted towards Everest.  Expekt is expected to disappear entirely before the end of 2010 and all of the company’s customers will be shifted over to Everest.

Since the announcement of the deal, shares of GigaMedia saw a spike in trading value.  After trading as low as $3.53 on December 11th, stock prices shot up as high as $4.24, an increase of 20%.

Harrah’s Earns Seven Awards for Sustainability

The continued greening efforts by Harrah’s have paid off, as the resort company recently earned seven gold medals from Travelife, an organization that promotes sustainability in tourism.  Gold medals were doled out to several of Harrah’s Las Vegas properties, including the Rio, Caesars Palace, and Bill’s Gambling Saloon.

The medals are designed to reward properties that make an effort to minimize negative impact on the environment, take advantage of locally-based companies when selecting vendors, and make a concerted effort to hire locally based individuals to better the social lives of people within the community.

Travelife is an organization set up by the European Union through the Federation of Tour Operations to advise travelers on companies and hotels that make efforts towards greening their company.  Harrah’s was the only gambling-related company to receive accreditation for multiple Las Vegas resorts, taking home eight total medals.  The gold medals went to the Rio, Caesars Palace, Bill’s Gambling Saloon, Flamingo, Paris, Bally’s, and Harrah’s, while Imperial Palace received a silver medal.

Gary Loveman, the Chairman and Chief Executive Officer of Harrah’s, commented on the honor in an official press release from the company: “I’m proud that each of our resorts in Las Vegas achieved this distinction. We’ve invested heavily in sustainability at Harrah’s and made it a core business principle that drives business strategy and operations.”

According to numbers found in Harrah’s press release, the company has launched more than 110 conservation projects across its numerous properties.  These efforts have resulted in the reduction of 77,850 tons of carbon dioxide emissions.  Some of the projects include the installation of water filtration systems in Harrah’s restaurants to cut down on bottled water use and the implementation of a new Las Vegas laundry facility that severely cuts down on the number of gallons of water used each year.

Even the Harrah’s-owned World Series of Poker (WSOP) is taking part in sustainability efforts.  An eco-friendly poker table designed by EGM Green was put on display as part of the 2008 WSOP festivities.  The table was made of 98% sustainable materials and was awarded to that year’s Main Event Champion, Peter Eastgate.  The table was auctioned off for charity this past July at the Friends of Eastgate fundraiser.  Casinos that install the EGM table can earn Leadership in Energy and Environmental Design (LEED) credits.

Harrah’s has also received several other green honors over the past year, including an Environmental Quality Award, which is the highest level of recognition bestowed by the Environmental Protection Agency (EPA).  Harrah’s partnered with the EPA last year to take part in the Climate Leaders project and recently teamed up with the organization again for the Water Wise project.

In September, the casino conglomerate announced it would be joining forces with Dell, SC Johnson, Starbucks, and Wrigley to form “Team Earth.”  Run by Conservationists International, the team is designed to bring together corporations, non-profit organizations, scientists, and educators to discuss environmental issues.

PIC Club, Merge Gaming Network Dissolve Relationship

When the Unlawful Internet Gaming Enforcement Act (UIGEA) of 2006 was enacted, the goal was to prevent online gaming enthusiasts from financing their accounts. With credit cards unusable and online processors such as Neteller no longer accepting gaming transactions, online poker players looked for other outlets to finance their accounts. In the time since then, PIC Club has stepped up to fill that void.

PIC Club is an online payment processor created last year that allows a player to invest in the company while playing poker at several different sites at the same time. One dollar is deducted from each deposit and put in a special account and represents the player’s investment in the company. A player can put their bankroll on PIC Club and, depending on where the best games are, move their money to different rooms with little or no delay. Over 130 different sites accept transfers from PIC Club for players to use in cash games and tournaments. In addition to offering a deposit option, the service also boasts Team PIC Club, a group of top professional poker players such as former World Series of Poker (WSOP) Main Event Champion and recent Tournament of Champions victor Tom McEvoy, the legendary T.J. Cloutier, and Poker Hall of Fame member Barbara Enright.

In a recent e-mail to members, PIC Club stated that its business arrangement with the Merge Gaming Network would be terminated. The Network is made up of over 40 poker rooms, including Carbon Poker, Poker Nordica, and ACED, and is currently the 17th most populated worldwide according to PokerScout.com. According to PIC Club, “Transactions to or from the rooms on the Merge Network will cease at 11:59PM (Eastern Time) on October 18th, 2009.”

The e-mail, signed by PIC Club Chief Executive Officer Chuck Kidd, addresses several issues that may face players who remove their money from Merge Gaming Network rooms: “If you choose to withdraw funds from any Merge Room back to PICClub, they will remain in a pending status, subject to review and approval by Merge management and if approved will only be released from the pending status when we receive the funds from the Merge Gaming Network to cover your withdrawal.”

No reason is given in the e-mail for the ending of the relationship, but Kidd’s statement seems to put the onus on the Merge Network: “We regret the dissolution of this business relationship. However, we believe it is in the best interest of PICClub and our Valued Members.” Kidd also states that PIC Club will enter negotiations with the individual rooms on the Network to provide PIC Club’s services to them directly.

Emilio Gomez Steps Down from Party Gaming Board of Directors

Party Gaming lost a member of its Board of Directors last week, when Non-Executive Directors Emilio Gomez stepped down from his post for personal reasons.  The official statement from Party Gaming announcing his resignation made no mention of a future replacement and noted a balance between Executive and Non-Executive members of the Board in the wake of Gomez’s departure.

Now that Gomez has moved on, the Board consists of seven members, including Chief Executive Officer Jim Ryan, Non-Executive Chairman Rod Perry, and Finance Director Martin Weigold.  Gomez first began his tenure as one of the group’s Non-Executive Directors in December of 2007 and served as the representative for Party Gaming co-founder Anurag Dikshit.

In December of 2008, Dikshit became the first online gambling mogul to face legal action in a U.S. Court when he agreed to forfeit $300 million in earnings from the company after admitting to breaking laws related to the Wire Act in conjunction with Party Gaming.  In exchange for the monetary settlement, Dikshit avoided jail time until at least December of 2010 and continues to reside in Gibraltar, where Party Gaming is based.  Dikshit stepped down from the Board of Directors in 2006 to serve as the company’s Head of Research and Special Projects.  There has been no announcement as of yet as to how Gomez’s departure will influence Dikshit’s influence on the Board.  Party Gaming can be found on the London Stock Exchange under the symbol “PRTY.”  It is the parent company of the popular online poker site PartyPoker.

Gomez’s resignation is just the latest in a long list of changes for Party Gaming this year.  The company’s purchase of World Poker Tour Enterprises (WPTE) in August as well as numerous business-to-business ventures like the purchase of the online bingo company Cashcade and the launch of an Italian online poker site in tandem with Intralot have headlined a busy 2009 for Party Gaming.  In its mid-year financial report, Ryan said the company would continue to pursue these profitable business-to-business deals and invest more time and effort in Party Casino, its online casino business.

In the week following Gomez’s announcement, PRTY shares have seen a slight drop in value, falling from a high of $282 on September 23rd to a low of $263.80 towards the end of day on the 24th.  At the close of the business day on Friday, shares were trading at $267.60. Despite the slight drop this week, Party Gaming stocks have been on a rise as a whole in 2009, increasing in value from $195 in January to a high of $283 in May to its current trading price of $267.60.

WSOP Extends Contract with IMG Sports and Entertainment

Harrah’s Interactive Entertainment (HIE) announced Thursday that its World Series of Poker (WSOP) brand would be renewing its contract with IMG Sports and Entertainment for five more years through 2014.  The two groups have worked together since 2005 and IMG has helped to bring major non-gambling sponsors like Jack Link’s Beef Jerky and Planters Peanuts to the popular tournament series.

Within a press release distributed by HIE, the company also placed emphasis on its efforts to grow the WSOP brand internationally into something larger than just an annual series of poker tournaments.  “We are looking to emphasize the ‘World’ in World Series of Poker as our vision of the brand extends beyond the annual events in Las Vegas and London,” explained HIE Chief Executive Officer Mitch Garber.  “By tapping the global reach and expertise of IMG, we are confident that together we can take the brand to new levels on the international stage through new international bracelet events and other WSOP licensed poker events.”

IMG has long been a power player in the representation game and has a client roster that includes Hollywood celebrities, Olympic and professional athletes, and several major athletic brands like Major League Baseball, the Ryder Cup, and the PGA.  With offices in over 30 different companies, HIE is hoping IMG’s global presence will serve them well in the next five years.

“The World Series of Poker is an impressive property that we believe is well positioned to expand successfully into international markets given the increased activity in the online and offline poker business in key international markets,” said David Abrutyn, Senior Vice President and Global Managing Director of IMG Consulting.

Harrah’s has been taking steps to position itself for this transition into the international poker markets.  First, it launched HIE earlier this year and hired former PartyPoker CEO Garber to run the operation.  Earlier this month, HIE also announced it would be teaming with 888 Holdings’ business-to-business venture, Dragonfish, to develop online content for the casino conglomerate.  Although the legality of online gambling remains up for debate in the United States, Dragonfish will supposedly create online gambling ventures branded for WSOP and Caesars Palace in European and other global markets.  The WSOP’s longstanding relationship with ESPN was also renewed recently, with a contract guaranteeing coverage of the event on the ESPN family of networks through 2017.

HIE and the WSOP are not without their critics, though.  Despite plans to make a grand entrance and participate in this weekend’s WSOP Europe, 11-time bracelet winner Phil Hellmuth recently spoke out against the company on the Hardcore Poker Show because of the steps being taken to expand the brand into online poker ventures.  Hellmuth, like many other top pros, has a sponsorship deal from an online poker site and fears HIE’s attempts to create a WSOP-branded room will jeopardize lucrative television logo deals that players use to subsidize their income.

“You know, there’s going to be some mistakes made by Harrah’s and just mark my words - they’re going to risk losing the World Series of Poker, which is estimated at $200 million,” Hellmuth said in his interview.  “It may actually become worth nothing if they force the players and all the great internet sites to say, ‘Look, we’re going to start our own deal because Harrah’s is restricting logos.’ They’re actually taking logo use out of the picture, or trying to press their position as a site owner.”

To date, there has been no official announcement of a WSOP-branded online poker site, but the hiring of Garber and recent steps taken by HIE lead many to believe that is the direction the brand is heading.

Harrah’s Interactive Signs Development Deal With 888 Holdings

In a surprise announcement on Friday, Harrah’s Interactive Entertainment, the branch of the company created earlier this year for the eventual foray of the longtime land-based casino powerhouse into the online gaming world, stated that they had entered into a long term deal with Dragonfish, a private business to business enterprise under the 888 Holdings PLC banner.

Earlier this year, Harrah’s - sensing the need to be ready when American laws, particularly the UIGEA, are either changed or overturned - created a branch of their company called Harrah’s Interactive Entertainment. Solidifying this organization, Harrah’s hired one of the most notable names in the online gaming world, former PartyGaming Chief Executive Officer Mitch Garber, to assume the same position with Harrah’s Interactive. With the signing of the deal with Dragonfish, Harrah’s will soon have everything in place for when the legal situation is cleared up in the United States.

The surprise deal will cover every aspect that Garber and Harrah’s Interactive need to have in place for an entry into the online gaming arena. The long term deal with Dragonfish covers the creation of an online poker and casino software, a system that will provide for e-payments, Customer Relations Management software and VIP services. There is no firm date for the debut of a Harrah’s related online gaming portal but, when it does come to fruition, there are two very popular and known commodities that will be the face of Harrah’s Interactive Entertainment - the World Series of Poker and Caesars Casino.

“This is a ground breaking deal for 888 and demonstrates our ability to provide real value to globally renowned, land-based casinos and their leading brands,” Gigi Levy, the Chief Executive Officer of 888, stated during the announcement of the deal. “We have the structure in place to realize our B2B division’s full potential over the next eighteen months and beyond and today’s announcement of our partnership with an industry giant is further vindication of this strategy.”

Garber was equally enthusiastic about the new deal with Dragonfish, adding, “As we develop and roll out our interactive strategy, we have chosen to work with 888, primarily for their world-class technology, scalability, and a strong commitment to compliance and responsible gaming.” As previously stated, there is no further details as to when these Harrah’s branded commodities will enter into the online gaming world.

The announced deal is a windfall for 888 Holdings as they recently had less than stellar news regarding their bottom line. In a report earlier this week here on Poker News Daily, it was revealed that 888 Holdings has seen significant declines in their earnings and revenues for both their online casino and poker room from 2008 to 2009. In their mid-year report to shareholders of the company, 888 saw a 13% decrease in overall revenue, down to $117.9 million midway from 2009 compared to $135.4 million for the same period in 2008. Casino revenues were down 20%, from $69.8 million last year to $55.9 this year, but it was their flagship poker room, 888 Pacific Poker, that saw the biggest drop in numbers. The online poker room saw revenue fall a full 35% in 2009, dropping from $40.2 million in 2008 to just $26.2 million in the period from January to June of this year.

While these numbers may appear bleak for 888, the surprise of the report was the exceptional performance of Dragonfish, which was one of the only parts of the company on the 888 dockets that was in the black. The company, just created earlier this year, signed several important deals that allowed 888 Holdings to report a 42% increase in business to business dealings, from $17 million in 2008 to $24.3 million in the first half of 2009. The signing of the deal between Dragonfish and Harrah’s Interactive Entertainment is a sizeable coup for 888 Holdings and should help not only Dragonfish but also 888 Holdings’ bottom line tremendously.

888 Holdings’ Poker Revenues Down 35% in First Half of 2009

The parent company of online poker room 888 Pacific Poker, 888 Holdings, is the latest online gambling business to release the results of their mid-year financial report.  Like many other businesses within the industry, 888.holdings saw significant declines in their earnings and revenues for both their online casino and poker room from 2008 to 2009.

The report, issued by 888 Holdings on August 27th, documented a 13% decrease in overall revenue, down to $117.9 million midway from 2009 compared to $135.4 million for the same period in 2008.  Casino revenue was down 20% from $69.8 million last year to $55.9 this year, but it was 888 Pacific Poker that saw the biggest drop in numbers.  The online poker room saw revenue fall a full 35% in 2009, dropping from $40.2 million in 2008 to just $26.2 million in the period from January to June of this year.  A statement released concurrently with the report attributed the decline to currency movements and the overall economic downturn, two issues numerous businesses within and without of the gambling industry have become intimately familiar with over the past several months.

While 888’s business to consumer ventures are struggling so far this year, the company saw massive gains in their business to business dealings.  The introduction of a new dedicated business to business company operating under the name Dragonfish has worked out well for 888 Holdings so far.  The official site for Dragonfish claims the site offers, “total gaming service,” and has brokered several major deals so far this year.  Just a few of the big business to business deals recently conducted through Dragonfish include an extensive deal with the Racing Post to develop an online casino and sports book, the development of casinos and poker rooms in the Balkans and partnering with several small online bingo companies.

The revenue for 888 Holding’s business to business dealings were up an impressive 42%, ballooning from $17 million in 2008 to $24.3 million in the first half of this year.  The performance of Dragonfish and a substantial revenue upswing for 888 Holdings’ emergent business offerings helped to temper their losses in their poker and casino businesses.

Chief Executive Officer of 888 Holdings, Gigi Levy, offered his own opinions on the company’s performance during the first half of 2009 in an official press release.  “The first six months of trading for 888 in 2009 have demonstrated the strength of the combined business model that comprises a world class B2C operator and an innovative and comprehensive B2B service provider,” stated Levy.  “While consumer sentiment is still weak and currencies remain volatile, we are trading solidly.”

The report also highlighted some of the recent developments with Pacific Poker over the past six months.  Most notably, the site introduced a new version of their poker client with 25 new features and upgraded the overall design of the site.  Some of 888’s other poker-related projects included the launch of pub poker leagues in the UK and Australia and the launch of a new poker reality show called “Poker Ashes”.  The show pits online qualifiers from 888 Pacific Poker against top rugby players from the UK and Australia like Shane Warne.

The statement from 888 Holdings also looked towards the future of the online poker market, addressing the pending legislation to regulate and tax online poker in the United States.  The company also mentioned the ongoing World Trade Organization as to whether or not the United States discriminating against European gambling companies.  As of now, the European Union and the US have not reached a settlement regarding the issue, but the company cited the case as something it is going to be closely following in the coming months.

PartyPoker Earnings Down 29%

The mid-year financial report is in at PartyGaming and while earnings are up for the company’s online casino, sports betting and bingo ventures its online poker room PartyPoker saw a 29% dip in earnings compared to this time last year. Overall, PartyGaming profits were down 6.5% from 2008, but in a recently issued earnings report the company remained positive about its future in the online gaming industry.

The report, released on August 28th, cited the overall economic downturn, currency movements and an increasingly competitive online poker market as the three major factors affecting their overall financial performance thus far in 2009. In the company’s year-end report for 2008 PartyGaming Chief Executive Officer Jim Ryan echoed similar sentiments about competing online poker sites, most notably those who continue to serve US customers in the years following the passage of the Unlawful Internet Gambling and Enforcement Act (UIGEA) in 2006. Since it pulled out of the US online poker market in 2006, PartyPoker has struggled to keep up with sites like Full Tilt Poker and PokerStars, both of which still accept real money players from the States.

PartyPoker’s net revenue for the first half of 2009 dropped to $102.6 million from $153.9 for the same period in 2008.  The company’s online casino, bingo and sports book also saw drops in net revenue, but their dips were minimal in comparison to the drop for the online poker room.  In fact, the PartyGaming online casino outperformed PartyPoker earnings by more than $10 million.

It was not entirely bad news for PartyPoker as the report highlighted several areas in which the site was making strides. While the poker room did report 20% drops in active users and daily number of customers, it did experience gains in new real money account sign-ups with 250,300 new accounts so far in 2009 compared to 235,200 in 2008.  The report also gave credit to the newly revamped loyalty program for PartyPoker customers for helping to increase player retention rates from last year. However, despite the increased retention the site still saw a noticeable drop in unique users over the period, down to 532,000 players from 2008’s 698,300 players. According to the report, PartyPoker currently holds a 7% market share of the global online poker market, down slightly from 8% in 2008.

The report also lauded the fast success of their Italian online poker venture Intralot. The tournament-only site launched in May of this year and quickly established itself as one of the top Italian poker sites. PartyPoker also expects to be able to offer cash games on Intralot before the year is over, which should lead to an even stronger performance in the second half of 2009.

A statement from Ryan affirmed that PartyGaming would continue seeking out business to business deals like the Intralot deal. In 2009 the company also acquired the European bingo venture Cashcade, inked a deal to develop an online casino for the British television station Five and, most recently, acquired World Poker Tour Enterprises for $12.3 million last month. “Our B2B strategy has delivered four deals so far this year that will start to contribute during the final quarter of 2009”, said Ryan. “With more deals in the pipeline we remain confident that we can continue to grow this important new source of revenue.”

Since the report’s release PartyGaming’s stock, which is publically traded on the London Stock Exchange under the symbol “PRTY”, has dipped. After trading at a monthly high of 276 pence on August 25th, shares were trading as low as 235 pence on September 2nd.

Mark Mayhew Named CEO of NEOVIA

NEOVIA, an online payment business that operates Neteller, Netbanx, Net+, and 1-Pay, announced that the search for its new President and Chief Executive Officer (CEO) has come to an end. Mark Mayhew will be stepping in to run the company starting in September.

NEOVIA’s previous CEO, Ron Martin, resigned from the position in March citing “family reasons” and ceased working at the end of May. The company’s Chairman of the Board, Dale Johnson, stepped in as the interim CEO while NEOVIA conducted a thorough search to find a replacement. In the end, the company settled on Mayhew because of his extensive background in payment operations. Prior to accepting the position with NEOVIA, Mayhew served as the Head of U.K. Consumer Banking at Morgan Stanley and the leader of CIMS, described by NEOVIA as “the individual membership business of Cendant.” Most recently, Mayhew served as the CEO of Debrett’s Ltd., a company that specializes in social etiquette.

Johnson had nothing but positive things to say about the new CEO in a statement released by NEOVIA earlier this month: “Mark is a very accomplished executive and his proven credentials in strategy formulation, operational development, and Plc governance, coupled with his deep financial services and payments expertise, uniquely qualify him to lead NEOVIA at this exciting time.”

Mayhew was equally enthusiastic when discussing his new position: “The company has a strong track record and also an eventful history, but I am excited by the opportunity to drive NEOVIA’s next phase of growth, building on the Group’s vision to deliver bold payment solutions to selected e-commerce communities.”

One challenge NEOVIA won’t have to worry about is future legal action stemming from processing payments from online gambling sites to U.S. customers. NEOVIA previously faced prosecution from the United States Attorney’s Office (USAO) following the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006 when it was still operating under the name Neteller. The USAO seized $60 million in Neteller funds in January of 2007 to use as evidence in a pending court case. Eventually, the company reached a Deferred Prosecution Agreement (DPA) with the USAO. As part of the agreement, Neteller consented to pay $136 million and take steps to prevent U.S. customers from transferring funds to and from online gambling sites via Neteller.

In the two years following the DPA, NEOVIA has complied with the terms of the settlement. Accordingly, the USAO announced earlier this month that the agreement has expired and the original complaint filed by the Southern District of New York has been dismissed.

With the last remnants of its legal troubles behind it, NEOVIA can now focus on the future. Customers located outside of the United States still use Neteller and NEOVIA’s other payment services to transfer funds on and off of online poker and other gambling-related sites. NEOVIA’s Neteller brand maintains close ties with the online poker community, most recently sponsoring June’s Poker in the Park event in London.

NEOVIA is a publically traded company on the London Stock Exchange, where it can be found under the symbol “NEO.”

888 Releases Q2 2009 Financial Results

888, the parent company of Pacific Poker, reported Total Operating Income of $61 million during the second quarter of 2009, a 7% increase compared to the year’s first quarter. However, it translated into a 12% dip year over year.

During the second quarter of 2008, 888 reported Total Operating Income of $69 million. Its business to consumer (B2C) Total Operating Income was $48 million in the second quarter of 2009, representing a growth of 7% over the first quarter, but a drop of 19% compared with the same interval last year. 888’s business to business (B2B) Operating Income weighed in at $12 million, a 4% increase over the first quarter this year and a 20% increase year over year.

Gigi Levy, Chief Executive Officer of 888, commented in a statement made to the London Stock Exchange, “We enter the seasonally quieter summer period with delivery of our strategy on track and we remain committed to investing in the business in spite of the macroeconomic environment. We are confident of delivering further growth during 2009 based on additional planned B2C activities and a set of newly launched B2B partnerships which we expect to start generating revenues in the coming months.” Given the global economic meltdown, 888’s Operating Income sank 13% during the first half of 2009 year over year to $118 million.

Casino Operating Income came in at $29 million, a slide of 20% in comparison to the second quarter of 2008, but an increase of 10% from its first quarter tally. Its Poker Operating Income totaled $13 million, a fall of 36% compared to the second quarter of 2008 (when revenues were $20 million) and a 9% drop from Q1 2009. The company’s Operating Income from Emerging Offerings grew by 88% in comparison to Q2 2008 and rose by 40% compared with Q1 2009. Emerging Offering Operating Income amounted to $7 million.

888 reported a customer base of 180,000 during the second quarter of 2009 for its poker and casino arms, a decrease of 8% from the headcount reported during the same period last year. However, the 180,000 customers translated into a 7% increase over the first quarter of 2009. The number of active poker customers was 142,000, a decrease of 7% over last year’s second quarter, but a growth of 7% over Q1 2009. The publicly traded company reported a casino base of 67,000 players, a drop of 10% year over year, but a growth of 7% over the first quarter. All told, the company has 6.4 million casino, poker, and sports betting customers.

The Quarterly Total Operating Income per casino customer, $439, was down 11% in the second quarter of 2009 in comparison to the same period in 2008. That total was on par with the first quarter of this year, increasing by 2%. The Quarterly Total Operating Income per poker customer amounted to $88, a fall of 32% in comparison to the second quarter of 2008 and a slide of 15% in comparison to the first quarter of 2009. 888 officials attributed the dramatic dip in poker revenue to “an extensive campaign late in the quarter which brought many customers toward the end of the quarter who did not have sufficient playing time to materially contribute to revenues.”

During the first half of 2009, Poker Operating Income was $26 million, a decrease of 37% in comparison to the $42 million taken in during the first half of 2008. The company also revealed that its average daily revenue during the first 28 days of July (the start of the second half of 2009) was 2% higher than during the first half of the year and on par with the overall tally during the second quarter.

888 is traded on the London Stock Exchange under the symbol “888.” It closed trading on Thursday down £0.05 to £79.95. Its full H1 2009 results will be released on August 27th.

WPT May Be for Sale

With the final days of the World Series of Poker (WSOP) playing out and the eighth season of the World Poker Tour (WPT) starting this week, poker has taken center stage in Las Vegas. Even with this activity, however, there are rumblings in one of the financial world’s top publications.

The Wall Street Journal on Monday published an article entitled “Deal Me In” by staff writer Brett Arends that asked whether the WPT was for sale. In the article, Arends quotes WPT Enterprises (the WPT’s parent company) Chief Financial Officer Tom Flahie as stating, “We can’t comment… beyond saying we’ve provided confidential data to third parties.” Founder and Chief Executive Officer Steve Lipscomb was reached by Arends in Gibraltar and added, “We’ve had discussions with, and exchanged documents with, some companies that have expressed an interest.” A WPT spokesperson told Poker News Daily, “Our general policy is that we do not comment on matters that are speculation or rumor.”

Arends’ article in the Wall Street Journal does an excellent job in documenting the history of the WPT and points out why it may be appealing to another organization to purchase the business. It also details how, over its seven-year history, the WPT has been one of the catalysts that drove poker to its unprecedented heights, but did not perform well on the bottom line of profitability.

While doling out hundreds of millions of dollars to players who have competed on the WPT circuit over seven seasons, the WPT has lost money over its entire history. In 2005, it reached its apex on the stock market at over $26 per share and was involved in the now-infamous potential buyout from poker legend Doyle Brunson. Once that sale failed to take root, the stock of WPT Enterprises collapsed to the point in which it was nearly de-listed from the NASDAQ after falling below $1 per share. Only recently has the stock stayed above $1 for ten consecutive trading days, securing the future of its listing. Currently, WPT stock is being traded at $1.36 per share.

While Arends’ examination of the WPT is thorough, there are questions as to who is the potential suitor that could pick up the tour. Gaming Intelligence Group has surmised that the possible buyer is the online sports book and poker room bwin, which recently teamed with the WPT to present an event in Venice, Italy. Other suggestions have included Full Tilt Poker, which has sponsored the WPT on Fox Sports Net for the last two seasons, and PokerStars, which is the international broadcast sponsor of WPT broadcasts.

More Guilty Pleas in BetOnSports Case

Neil Scott Kaplan, Lori Kaplan-Multz, and Penelope Tucker have all pled guilty to U.S. District Court Judge Carol E. Jackson, according to an article published by Bloomberg on Tuesday. Now, BetOnSports Founder Gary Kaplan faces trial on September 21st.

Former BetOnSports Chief Executive Officer (CEO) David Carruthers pled guilty in April and faces up to 33 months behind bars. Carruthers’ sentencing is scheduled for October. A statement released by iGamingNews at the time noted that Carruthers planned to cooperate against others who were still being held by the U.S. Department of Justice. Now, only Kaplan remains. The other defendants pled guilty to “racketeering conspiracy and the illegal transmission of bets,” according to Bloomberg.

Kaplan was arrested in the Dominican Republic in March of 2007. An article published by BBC News two years ago noted that BetOnSports reaped 95% of its profits from U.S. residents and exited the market in August of 2006. That October, the Unlawful Internet Gambling Enforcement Act (UIGEA) was signed into law by then-U.S. President George W. Bush. The measure prohibited the transfer of funds from banks and other financial institutions to illegal internet gambling outfits, although it failed to specify what activities were permissible. The regulations of the UIGEA were approved as “midnight rules” in November and implemented on January 19th, one day before President Barack Obama took office. The financial services industry must come into full compliance with the UIGEA by December 1st.

Carruthers was kept under house arrest in St. Louis after being picked up by U.S. authorities in Texas in 2006. According to Bloomberg, Kaplan faces charges of “racketeering conspiracy, mail fraud, and wire fraud.” His brother, Neil, told Judge Jackson, “Having seen my brother’s companies advertised openly on billboards in New York and other places, I believed his company was lawful.” His sister, Lori, pled guilty to “racketeering conspiracy and the illegal transmission of wagers,” according to the U.S. news outlet.

The St. Louis Post-Dispatch noted that Neil, Lori, and Tucker each will fork over money held in Swiss bank accounts as part of the agreement. The former two will spend time in a halfway house, but not be imprisoned for soliciting U.S. customers. Tucker will receive a one year probation and pay $15,000. The Post-Dispatch explained, “Assistant U.S. Attorney Steve Holtshouser said the sentences reflect the minimal roles that Neil Kaplan and Kaplan-Multz played, their lack of decision-making power there, and their willingness to surrender their BetOnSports money.”

Party Gaming entered into a non-prosecution agreement with the U.S. Attorney’s Office for the Southern District of New York in April. As part of its agreement, the company agreed to pay a $105 million fine over a three and a half year period. In December, one of its co-founders, Anurag Dikshit, admitted to violating the Wire Act of 1961 in a New York courtroom. He faces up to three years behind bars and will be sentenced later this year. Dikshit is in the process of paying a $300 million fine. Forbes noted that Dikshit has a net worth of $1 billion and currently resides in Gibraltar. He developed the client software for Party Gaming, which owns and operates PartyPoker.

Also in the background of today’s developments is the seizing of over $30 million in online poker payment processor funds by the U.S. Attorney’s Office for the Southern District, which is the main office charged with handling financial crimes. No legal action has yet been filed in the case. Poker Players Alliance Chairman Alfonse D’Amato, appearing on Fox Business, explained, “It is not illegal for a person to play poker on the internet. What the [UIGEA] did was say that the payment processors, the financial community, could not distribute these funds.”

No indication was given as to what Kaplan’s future now holds.

Doyle Brunson signs a deal with Poker Royalty

Poker icon Doyle Brunson signed a worldwide management and marketing representation deal with Poker Royalty. The deal includes all major platforms, including media, sponsorship, licensing, commercial endorsements and appearances.

(Disclaimer: These girls are not from Poker Royalty!)

“Texas Dolly” Brunson is considered to be the poker’s modern day patriarch. No one can deny his achievements as the living legend has been in a major role to uplift poker’s image. He has been one of the most important people to build poker as big as it is these days.

“I’ve heard nothing but good things about them. I’m a terrible businessman and dealmaker, so I’m glad to be able to turn over all that stuff to them”, Brunson says about Poker Royalty and the deal.

Currently Brunson holds ten WSOP bracelets, two of them which are from Main Events. These two Main Event victories came in 1976 and 1977 when Doyle held 2-10 as conclusive pocket cards. No wonder the hand is now known as the “Doyle Brunson”.

Nobody can question Doyle’s superior poker skills, but he’s a successful author as well. His ‘Super System’ can be considered as the basis of modern poker.

The founder and Chief Executive Officer of Poker Royalty, Brian Balsbraugh tells that representing Bruson is his career highlight. “If it weren’t for Doyle and his hard work the poker industry would not have evolved to the point where there could even be a Poker Royalty. I have no doubt we will do some big things together.”

You just read Poker News from HighStakesNews.com

Doyle Brunson signs a deal with Poker Royalty

NEOVIA CEO Ron Martin to Step Down May 31st

On the heels of a March announcement that NEOVIA CEO Ron Martin was departing the company for “family reasons,” the parent company of Neteller announced that his final day in office will be May 31st. Chairman of the Board Dale Johnson will then head NEOVIA until a permanent successor can be found.

On the search for a new executive, a statement made by NEOVIA to the London Stock exchange read, “The Board has commenced a process to select a new Group Chief Executive Officer and good progress is being made in this regard.” In the meantime, Executive Vice President Dan Starr and Chief Financial Officer Doug Terry will assist Johnson while the group finds Martin’s replacement. The interim CEO commented in a press release, “On behalf of the Board and management team, I would like to thank Ron for his significant contribution to the Group over four challenging years. In the current challenging market conditions, the Board and management team are focused on maximizing revenues in the short-term, maintaining control over costs, and preserving cash to deliver value for all shareholders.” No timeline has been given as to when the search for a new CEO will be completed.

In October, Neteller Plc announced that it would forever be known as NEOVIA Financial Plc after an approval by the company’s shareholders. The company was formerly traded in London under the symbol “NLR” and can now be found under “NEO.” In trading on the London Stock exchange on Friday, shares of NEO closed up ?0.75 to an even ?45.00. Over the past 52 weeks, NEOVIA’s stock has traded in a wide range between ?34.00 and ?72.50 with an average volume of 430,000 shares. Neteller remains one of NEOVIA’s brands and is used by several online poker rooms for taking deposits players from outside of the United States.

Highlighting NEOVIA’s financial transactions on Thursday was news that Franklin Templeton Investments held over five million ordinary shares, or 4.18% of the shares outstanding. A trade of 40,000 shares was entered on Friday at a price of ?45.21. NEOVIA has a total of 119 million shares available. Shareholders are now invited to head to the Isle of Man for the company’s Annual General Meeting, which will be held at the Claremont Hotel in Douglas on June 17th.

In 2008, NEOVIA reported revenues of $75.6 million, which was up 9% from the $69.1 million that the company saw in 2007. “Fee revenue” weighed in at $69.5 million, up a hefty 26% from 2007’s tally of $55.6 million. NEOVIA posted a profit before tax of $6.4 million in 2008, up significantly from 2007, when it incurred a loss of $12.8 million. The number of e-wallet users was 97,673 during the fourth quarter of 2008, down slightly from the final quarter of 2007, when the number of e-wallets was 99,984. Average daily signups (981 in 2008) were comparable year over year. Average daily receipts were down substantially in 2008 from 2007. During that time span, the financial indicator dropped from $656,000 to $457,000.

In October of 2008, NEOVIA launched the Net+ card to e-wallet customers. In addition, the company touted “enhanced core e-wallet functionality in 2008 for customer and merchant improvements.” The company also hinted that it will roll out Newteller, its “new business platform,” during the third quarter of 2009. Its major stakeholders include IIU Nominees Limited, which owns 26.03% of shares outstanding. UBS and Fidelity own 4.30% and 4.99%, respectively, while Standard Life Investments Limited owns 6.99% of shares. NEOVIA is based in the Isle of Man and also has offices in Cambridge (United Kingdom), Calgary (Canada), Macau, and Hong Kong.

888 Operating Income Grows 21% in 2008

In its 2008 end of year results released this week, 888, the parent company of Pacific Poker, revealed that its operating income grew by 21% last year to $262.5 million. In 2007, it reported operating income of $216.9 million.

888's casino arm saw its revenue balloon by 14% to $135.1 million in 2008, up from $118.1 in 2007. However, Pacific Poker's revenues dropped by 4% from $80.8 million in 2007 to $77.2 million last year. All told, 888 posted a profit before tax of $48.6 million during the 2008 calendar year, up 6% from 2007. This resulted in a final dividend of 2.9 cents per share.

Operational highlights for the brand in 2008 included 14 new business customers, including an arrangement with Sportech PLC, which was forged back in June. The addition of two new Bingo customers brought its total stable to nine and, on the same day as its earnings were released, 888 announced a partnership with the Racing Post, which it describes as “the pre-eminent horse-racing industry publication.” Also during 2008, the company launched 888sport.com and 888ladies.com.

888's Chief Executive Officer, Gigi Levy, commented in the company's earnings release, “We believe that this successful model, offering both B2B and B2C businesses, is key to growth in the online gaming market in the coming years. Despite the difficult economic circumstances during the last few months of 2008, our underlying business remained strong.” The company warned that its first quarter revenues in 2009 will likely be lower than its fourth quarter revenues in 2008, reflecting the downswing in the global economy.

In 2008, Pacific Poker became available in 11 languages: Russian, Polish, Czech, Bulgarian, Hungarian, Romanian, Lithuanian, Latvian, Estonian, Greek, and Japanese. The report by 888 also revealed that Pacific Poker may receive a makeover in 2009: “The Pacific Poker site will be given a new look and feel, with additional products and poker side bets enhancing the customer experience of the poker room.” Pacific Poker, like other online poker sites owned by publicly traded companies, does not accept customers from the United States. The decision came after the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006.

The number of active customers on Pacific Poker sank from 170,988 during the first quarter of 2008 to just 158,557 during the fourth quarter. Consequently, its average revenue per customer fell from $128 to $107. On its lackluster close to the 2008 calendar year, 888 officials explained, “Due to the prolonged and deepening economic downturn, unprecedented challenging trading conditions were experienced following the end of the summer holiday season. Active customers played slightly less and volatile adverse foreign exchange movements exacerbated the effect on US$ denominated revenues.”

Nearly a quarter of a million new players deposited for the first time on 888's poker or casino platforms last year. It inked poker agreements with Poker Dome, Littlewoods, and Lucky Ace in 2008, further growing its presence in the marketplace. Similar to other internet gambling sites that do not accept U.S. players, 888 is keeping close tabs on the developments between the European Commission and World Trade Organization. Last week, the Commission's preliminary findings revealed the U.S. is in violation of its trade obligations due to its stance on internet gambling. A final report is due this month.

According to traffic ranking site PokerScout.com, Pacific Poker boasts the 13th busiest network worldwide in terms of cash game volume with a seven day running average of 1,100 players. Its 24 hour peak is nearly double that number, 2,174. At the time of writing, which is late afternoon throughout Europe, nearly 1,400 ring game players are seated at its virtual felts.