Lower Interim Results for 32Red

The Gibraltar-based online casino, sportsbook and poker operator, 32Red, reported disappointing interim results to the end of June.

The online gambling company said that trading has been mixed and that it was possible that market expectations for the full year would not be realized. Casino performance has been slower than anticipated in recovering from the distractions of the FIFA World Cup and despite an increase of 60 percent in the number of active players, the average value of each player had declined to ₤523.

Operations in poker rooms continued to show substantial growth from a low base in 2005 with revenues more than doubling and active players tripling in the first half of 2006.

The FIFA World Cup 2006 exacerbated the situation and resulted in a material decline in activity levels in the month of June. Trading during the FIFA World Cup produced a 9.8 percent gross win margin. Other contributing factors may have been the launch of Swedish national gambling operator Svenska Spel’s online poker room and aggressive rakeback tactics by competitors, both of which had impacted revenues negatively from mid-March onwards.

To the end of June, the Royal Ascot horse racing festival and the FIFA World Cup were traded by 32Red. Gross win was ₤100,000 off target with Ascot producing a small negative margin. Sportsbook operations did not meet expectations following the early June acquisition of Bet Direct.

Despite the lower than expected performance, 32Red managed to turn a profit with group revenues up 48 percent to ₤6.2 million, the casino side making up ₤5 million of the totals. Pre-tax profits for casino and poker operations were ₤1.1 million and the number of total active customers increased to 44,539.

Chief executive of 32Red, Ed Ware, said: “The 32Red business has shown revenue growth in the period. However, trading in the second half to date has not recovered as quickly as anticipated from the industry wide FIFA World Cup slowdown.

“We believe the acquisition of Bet Direct in June will significantly enhance the scale and diversity of the business although a tough Goodwood and the one-time costs and expenses incurred, have impacted our profitability.”

Back to Lastest Gambling News
Back to Gambling News Archive
Back to Gambling News - September 2006 Archive