Swedish online gaming operator Entraction Holding AB released its third quarter financial statements this week and showed a decline of 22.1% in net sales, including a massive drop in poker revenue. Poker room returns fell 33% to SEK (Swedish Krona) 46.9 million in the third quarter of 2010 from SEK 69.9 million in the same period last year. That amounts to $6.8 million, down from $10.1 million.
In the first three quarters of 2010, poker revenue was down 31% to SEK 158 million compared to SEK 229.3 million in the first nine months of 2009. Net sales for the first nine months were down 13% from the same period the previous year.
According to PokerScout.com, the Entraction Network is the 13th largest poker network in the world, averaging around 1,500 cash game players over the past seven days and seeing a peak of 2,626 players on Thursday. Its average traffic hovered around 1,000 players during June, July, and August, but the network has seen an increase in the fourth quarter.
“Experience tells us that the third quarter is relatively tough and poker has also shown lower growth than in previous years,” said Peter Astrom, Chief Executive Officer for Entraction. “However, it should be noted that during the period, we increased our liquidity in the poker network, launched an action program, which is already making its effects felt in the fourth quarter, and signed an exclusive agreement with one of the market’s largest gaming operators. These factors and the increase in revenues in the early part of the fourth quarter point towards a rapid turnaround of our results even before the end of the year.”
The company isn’t alone in its declining poker revenues, as several other online gaming operators reported losses in the third quarter. Playtech, for example, saw a drop of 30% in the third quarter of 2010. Playtech software powers the iPoker Network, which ranks third in online traffic behind PokerStars, Full Tilt Poker, and PartyPoker.
Along with the poker losses, Entraction also posted a 109.7% year-on-year drop in earnings before interest, tax, depreciation, and amortization for the third quarter of 2010. The firm said that earnings had been “adversely affected by staff layoff costs and expected customer losses of SEK 10 million, while the weak Euro had a negative impact of SEK 2.0 million.” Operating profit adjusted for staff layoff costs and customer losses amounted to SEK 4.9 million.
The Entraction Network is primarily geared toward European players, as the Euro is the preferred currency on the site; the network is unavailable to players in the United States. The poker room offers a wide variety of games on top of the always-popular Texas Hold’em and Omaha. You can also find Telesina Poker, which is a variant of Five Card Stud that uses a stripped deck and includes an element of community card games. You can also find Draw Games, Soko, Seven Card Stud, and Five Card Draw.
Entraction was founded in 2000 and is based in Stockholm. Its stock is listed on the NASDAQ OMX First North Premier exchange and, at the time of writing, was trading at $34.80, down $1.10 on the day.