Bwin.party will "not give up the fight" on poker

Bwin.party CFO Martin Weigold (pictured) says the firm will “not give up the fight” on poker after the operator this morning revealed revenues from the vertical had slumped 25% year-on-year to €17.5m in Q3, with a further 25% drop expected in 2015.

The Gibraltar-based firm did, however, highlight the fact that poker had grown sequentially in August and September and was hopeful that a series of mobile improvements would see the vertical post improved numbers in Q4.

And in a bid to arrest overall decline, bwin.party said it had altered some of its tournament structures, and was focusing on big events such as PokerFest on its dot.com domain and pooled liquidity on its dot.fr client.

But Martin Weigold, bwin.party CFO, admitted they didn’t expect to see growth in the vertical over the short term despite positive signs in the previous two months.

“We are planning for it [poker] to drop by up to 25% next year, but we haven’t given up the fight on it [poker] and we are making lots of changes to try and make the product offering more attractive, and hope that we will see the trend [of sequential growth] continue,” he added.

The drop in poker was offset by an 11% increase in sportsbook revenues to €58.8m during the period, which helped drive a 2% YoY increase in total revenues to €148.7m.

But the sportsbook performance was largely down to a strong finish to the World Cup with growth outside of the tournament just 2%.

Weigold was keen to point out that some of the betting that would have taken place on World Cup would have “effectively cannibalized” betting on other markets had the tournament not happened, and said the 2% growth figure was “understated”.

Casino net revenue was down 3% to €48.5m during the period with the firm saying a higher cross-sell from sports was offset by a “soft poker performance and the loss of Greece”.

“We have launched a new browser-based product in Spain, which is extraordinarily successful in that market,” Norbert Teufelberger, bwin.party CEO, said. “We took the learnings from the browser-based product and translated it to Android and iOS.”

“We are launching both our products in a series of our core markets in the next few weeks, and that will not only be an upgrade to our sport product, but will also include a seamless integration of casino games. And we expect a very nice up-tick on the casino side there from improved cross-sell on the mobile client,” he added.

The operator’s long-term ‘volume-to-value’ strategy also made some progress across the quarter as revenues derived from regulated or taxed jurisdictions increased from 53% to 56%. The operator said it was on target to achieve 75% of revenues from regulated markets by 2015.

“We are still aiming to reach that target by the end of 2015 of 75%,” Weigold said. “To some extent it depends on which markets regulate and when and on what basis. But right now we are comfortable with that,” he added.

In the US, bwin.party said it was “re-sizing” its approach in New Jersey – despite taking the market lead with land-based partner the Borgata – in a bid to reduce advertising spend while still remaining in a strong position should more states legalise and regulate egaming next year.

“All of the operators in New Jersey are re-sizing their approach,” Teufelberger said. “Most operators expected the market to be substantially bigger, especially the poker market. So what we are doing right now is bringing our marketing spend down, and we are in the process of right-sizing our approach.

“We are currently preparing for an approach that has less marketing spend but still keeps us in play and positions us should new states start to legalize in the US,” he added.