BPTY.L Regulatory News (BPTY)

6 July 2010

PartyGaming Plc

("PartyGaming" and, together with its subsidiaries, the "Group")

Pre-Close Trading Update

·; Total revenue during the second quarter, now reported in Euros1, expected to be approximately 2% lower quarter-on-quarter and up approximately 28% on the prior year

·; Overall trading in-line with the Board's expectations despite the adverse impact of the World Cup being greater than expected on poker

·; Casino revenues1 grew quarter-on-quarter despite seasonality and the impact of the World Cup

·; Bingo and sports betting revenues1 were steady versus the previous quarter despite seasonality

·; Prospective licensing and regulation in Europe and the US offers exciting medium to long-term revenue potential through both B2C and B2B opportunities

·; Board remains committed to playing an active role in consolidation and is confident about future prospects

PartyGaming Plc, the world's leading listed online gaming company, announces that overall trading since the end of April has been in-line with the Board's expectations. Whilst the relatively unexpected results in the World Cup football games played to-date have had a favourable impact on sports betting margins in the period, the adverse impact on our other product verticals has been greater than expected. Total revenue is expected to be approximately 2% down on the first quarter as reported in Euros, which as previously announced is now PartyGaming's reporting currency. Year-on-year, total revenue is expected to be up approximately 28% on the prior year, primarily due to the acquisitions of Cashcade and the World Poker Tour and continued strong growth in casino.

In US dollars, it is expected that total revenue would have been down between 6% and 7% quarter on quarter, in-line with our previous guidance. It is expected that total revenue in US dollars during the second quarter would have been up by approximately 17% year-on-year.

Poker has been particularly tough with the number of daily average players expected to fall by between 8% and 9% versus the first quarter, coupled with lower yields due to reduced frequency of play on the back of both seasonality and the World Cup. As a result, we expect poker revenue in Euros to be down between 11% and 13% quarter-on-quarter (or down between 15% and 17% in US$).

The new licensing regime that would permit cash game poker in Italy has been delayed and is now not expected to occur until the fourth quarter of 2010. This delay adversely impacted Clean EBITDA margins in the first half due to a lower than expected return on marketing spend that was committed before the deferral of the new licensing regime. In France, we launched our licensed PartyPoker.fr site on 1 July 2010, one of the first operators to enter this newly regulated market, and we are very encouraged by our network's performance to-date.

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Casino has continued to perform well and is expected to show net revenue growth of approximately 6% in Euros versus the seasonally strong first quarter (or up approximately 1% in US$). This is due primarily to an increase in yield thanks to a higher hold and favourable currency movements with daily average player numbers expected to be down approximately 5% on the back of seasonality.

Net revenue in both bingo and sports betting is expected to be steady quarter-on-quarter (or down between 5% and 7% respectively in US$).

We retain our guidance for full year Clean EBITDA margins of approximately 28%, although the final outcome for the year will be subject to the rates of return on marketing spend planned for the second half of the year that will be deployed in newly regulated markets such as France and Italy, where the exact timing and detail for the further liberalisation of the market have yet to be finalised.

Full details of all of the Group's historic financial statements and quarterly key performance indicators have been translated into Euros using the exchange rate at 1 January 2010 of 1 US dollar = 0.695 Euros and can now be downloaded from the Group's website at: http://www.partygaming.com/investor/documentation.html. The Group's financial results for the six months ended 30 June 2010 will be announced on 6 August 2010.

Commenting on today's announcement, Jim Ryan, Chief Executive Officer, said: 

"We are pleased with the relatively robust performance of our business compared to many other consumer facing businesses in what remains a challenging economic environment. Overall the Group has performed in-line with expectations even though the adverse impact of the World Cup on our non-sports betting verticals was slightly greater than expected.

"We have made great progress in securing partners for our poker network in France with PMU, AB Groupe and Aviation Club de France already in place. We expect to add another significant partner to our French network in the near future. The early signs from this important new market are encouraging.

"The World Poker Tour is performing in-line with our expectations and we believe that this asset, combined with the strength of the PartyPoker brand and the resolution of our US legacy issues ensures that we are well-positioned should online gaming become regulated in the US. In this respect, discussions are progressing well with a number of potential US-based gaming partners.

"Whilst progress on consolidating the online gaming industry has been slower than expected, we remain committed to playing an active role and are continuing to pursue opportunities with a number of parties.

"Despite the challenges presented by the prevailing macroeconomic and competitive environments we are on track with the execution of our stated strategy. As governments around the world look to adopt regulatory frameworks, given the strength of our brands, our scale, excellent B2C and B2B products, we remain confident about the Group's prospects." 

Editor's Notes

About PartyGaming:

PartyGaming Plc is the world's leading listed online gaming company. The Group is a constituent of the FTSE 250 share index with its shares listed on The London Stock Exchange under the ticker: PRTY. In the year to 31 December 2009, PartyGaming's Continuing operations generated revenue of €310.1m and Clean EBITDA of €93.8m. PartyGaming's principal brands are www.PartyPoker.com, one of the world's largest online poker rooms, www.PartyCasino.com, the world's largest online casino, www.PartyBingo.com, www.PartyGammon.com, www.PartyBets.com, www.InterTrader.com, www.FoxyBingo.com, www.GetMinted.com, www.Gamebookers.com and www.WorldPokerTour.com. None of the Group's sites accept real money customers located in the US.

PartyGaming is regulated and licensed by the Government of Gibraltar and by the Alderney Gambling Control Commission and it is also certified as a responsible gaming operator by GamCare, the leading UK authority on the provision of advice, practical help, support and counselling in addressing the social impact of gambling. PartyGaming's shares are also a constituent member of the FTSE4Good Index Series, which enables investors to identify companies that meet globally recognised corporate responsibility standards. For more information, please visit www.partygaming.com.