10 Jan 2013 07:00
10 January 2013
bwin.party digital entertainment plc
('bwin.party' or the 'Company' and, together with its subsidiaries, the 'Group')
Pre-Close Trading Update
Highlights
Ø Trading since 30 September 2012 has been in-line with management's expectations
Ø Continuing Clean EBITDA margin for the year ended 31 December 2012 expected to be between 19.5% and 20.5%
Ø Successful migration of bwin.com customers to our single technology platform
Ø Italian slots launched on 3 December 2012
Ø Poker and casino licence awarded in Schleswig-Holstein
Ø On-track to deliver approximately €65m of synergies in 2013
Trading update
Since the end of September 2012 the Group's performance has been in-line with management's expectations. Gross win margins in sports betting returned to more normalised levels in November after a very strong run of results in October, although this is still well above last year reflecting a shift towards longer odds and the partial recovery of the 5% turnover tax from German customers.
In poker, while a greater focus on player acquisition via direct channels rather than through affiliates may reduce new poker sign-ups and active player days going forward, it is not expected to materially affect revenue and will continue to improve the poker ecology within our network. We remain on course to launch an all new version of PartyPoker during the first half of 2013.
In casino, we successfully launched slots to our Italian customers on 3 December and the early performance has been encouraging, in-line with expectations. Our bingo business has remained steady since September.
In respect of the merger integration, a key milestone was reached with the successful migration of the bwin.com customers onto our single technology platform on 17 December 2012. The remaining French and Italian migrations remain on track to complete in the first half of 2013.
For the year ended 31 December 2012, Continuing Clean EBITDA margins are expected to be in the range of 19.5% to 20.5%.
Regulatory update
Since the end of September there have been a number of positive developments on the regulatory front. In Germany, on 20 December 2012 the Group was one of 12 operators to receive a six-year licence to operate online casino and poker games in Schleswig-Holstein. This was after Schleswig-Holstein received detailed opinions from the European Commission and Malta with further comments from the UK government, challenging its proposed revocation of the existing law, one that had established a regulated licensing regime for online sports betting, poker, casino and bingo games. There is now a question over how the existing regime in Schleswig-Holstein can co-exist with the alternative system proposed by the other 15 Länder that seeks to allow sports betting only and with significant additional restrictions for the online offer, restrictions that do not apply to land-based operators.
Despite the recent detailed opinions and the possible threat of a formal infringement procedure, Schleswig-Holstein may choose to press ahead with the revocation of its existing law and its accession to the framework proposed by the other 15 Länder. Whilst we welcome the move to regulate the online gaming market in Germany, this must be in a consistent and coherent manner in-line with EU law.
In Belgium, further to the announcement made on 14 December 2012, Belcasinos, our local partner is in the process of securing the requisite operating licences to operate all online products.
In the United States, a new bill to regulate online poker and casino gaming was passed in New Jersey and is now awaiting the Governor's signature before it can become law. Having previously vetoed the bill over constitutional concerns, the Governor has until 3 February 2013 to either sign or veto the bill. In California, Senator Roderick Wright has re-introduced his bill to regulate online poker in the state. Through our existing partnerships, we remain well-placed to take advantage of these intra-state opportunities, should the requisite legislation become law.
Contacts:
bwin.party digital entertainment plc
InvestorsPeter Reynolds +44 (0) 20 7337 0100
MediaJohn Shepherd +44 (0) 20 7337 0100