In its 2008 end of year results released this week, 888, the parent company of Pacific Poker, revealed that its operating income grew by 21% last year to $262.5 million. In 2007, it reported operating income of $216.9 million.
888’s casino arm saw its revenue balloon by 14% to $135.1 million in 2008, up from $118.1 in 2007. However, Pacific Poker’s revenues dropped by 4% from $80.8 million in 2007 to $77.2 million last year. All told, 888 posted a profit before tax of $48.6 million during the 2008 calendar year, up 6% from 2007. This resulted in a final dividend of 2.9 cents per share.
Operational highlights for the brand in 2008 included 14 new business customers, including an arrangement with Sportech PLC, which was forged back in June. The addition of two new Bingo customers brought its total stable to nine and, on the same day as its earnings were released, 888 announced a partnership with the Racing Post, which it describes as “the pre-eminent horse-racing industry publication.” Also during 2008, the company launched 888sport.com and 888ladies.com.
888’s Chief Executive Officer, Gigi Levy, commented in the company’s earnings release, “We believe that this successful model, offering both B2B and B2C businesses, is key to growth in the online gaming market in the coming years. Despite the difficult economic circumstances during the last few months of 2008, our underlying business remained strong.” The company warned that its first quarter revenues in 2009 will likely be lower than its fourth quarter revenues in 2008, reflecting the downswing in the global economy.
In 2008, Pacific Poker became available in 11 languages: Russian, Polish, Czech, Bulgarian, Hungarian, Romanian, Lithuanian, Latvian, Estonian, Greek, and Japanese. The report by 888 also revealed that Pacific Poker may receive a makeover in 2009: “The Pacific Poker site will be given a new look and feel, with additional products and poker side bets enhancing the customer experience of the poker room.” Pacific Poker, like other online poker sites owned by publicly traded companies, does not accept customers from the United States. The decision came after the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006.
The number of active customers on Pacific Poker sank from 170,988 during the first quarter of 2008 to just 158,557 during the fourth quarter. Consequently, its average revenue per customer fell from $128 to $107. On its lackluster close to the 2008 calendar year, 888 officials explained, “Due to the prolonged and deepening economic downturn, unprecedented challenging trading conditions were experienced following the end of the summer holiday season. Active customers played slightly less and volatile adverse foreign exchange movements exacerbated the effect on US$ denominated revenues.”
Nearly a quarter of a million new players deposited for the first time on 888’s poker or casino platforms last year. It inked poker agreements with Poker Dome, Littlewoods, and Lucky Ace in 2008, further growing its presence in the marketplace. Similar to other internet gambling sites that do not accept U.S. players, 888 is keeping close tabs on the developments between the European Commission and World Trade Organization. Last week, the Commission’s preliminary findings revealed the U.S. is in violation of its trade obligations due to its stance on internet gambling. A final report is due this month.
According to traffic ranking site PokerScout.com, Pacific Poker boasts the 13th busiest network worldwide in terms of cash game volume with a seven day running average of 1,100 players. Its 24 hour peak is nearly double that number, 2,174. At the time of writing, which is late afternoon throughout Europe, nearly 1,400 ring game players are seated at its virtual felts.
