• 888 says poker growth still strong

November 1, 2005 - LONDON (Reuters) - Claims that Internet poker's growth is tailing off are unjustified and the sector is still growing strongly, 888 (888.L: Quote, Profile, Research) said on Tuesday after reporting a 56 percent increase in overall third-quarter revenue. The online casino and poker-room's roadshow for its flotation in September was dogged by comments from industry leader PartyGaming (PRTY.L: Quote, Profile, Research) that poker growth was moderating, spooking investors. But in his first interview since the company listed, Chief Executive John Anderson told Reuters that those concerns were more likely specific to PartyGaming at that time than to the industry as a whole. "As we said on the roadshow to all the investors who asked that question, I thought that it was a company-specific issue and not an industry-specific issue, and I think that has been borne out to be correct," he said. PartyGaming has since boosted revenue by partially splitting from partner Web site Empire Online (EOL.L: Quote, Profile, Research). 888's net gaming revenue from poker and casino games rose 56 percent year-on-year to $70 million (40 million pounds) in the three months to September 30, while poker revenues alone rose 178 percent to $29.5 million. Shares in 888 jumped 5 percent in early trading, but later fell back and were up just 0.9 percent at 172 pence at 10 a.m., just below their September market debut price. PartyGaming shares rose 1.4 percent. POKER VS WORK "It depends what you mean by moderation," Anderson added. "Last year there was growth of something like 250 percent. There's no way in the world that that's going to continue, because 250 is a huge number." "And if it did continue, in two or three years, compound-wise, we'd all be playing poker and nobody would be doing any work. But it's still very, very strong." Analyst Charles Wilson at Bridgewell Securities described the figures as a "healthy debut". "The robust Q3 statement from 888 should also help restore the market's confidence in the online gaming sector," he added in a research note. Third-quarter average poker spending per player was $129, up 19 percent on the second quarter. Analyst Greg Feehely at Altium Securities said the figures boded well for 888's rival Sportingbet (SBT.L: Quote, Profile, Research), which also has poker and casino games, and he reiterated his 'buy' recommendation on Sportingbet. "This suggests that the online poker market is either growing more strongly than PartyGaming would have us believe, or that 888.com is taking market share, possibly both," he said. Customer acquisition costs are stable compared with the period during the roadshow, Anderson said.

> Read the full story here Source: Reuters.co.uk

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