PartyGaming – How is Business?

February 2, 2010 Bingo Scotland, Foxy Bingo

Written by Lisa (February 2, 2010 at 12:11 am)

PartyGaming paid an initial £71.9 million for Cashcade whose extensive portfolio included some of the biggest brand bingo names online; such as Think Bingo, Bingo Scotland and the ‘official’ UK No1 operator Foxy Bingo: Making PartyGaming one of the largest online gaming operators in the world.  It was also agreed that up to another £24million might be payable, depending on how the business performed in the future.  So how is business?

Only days ago PartyGaming confirmed they were discussing possibilities with other gaming companies;   “The board of PartyGaming confirms that it is continuing to hold discussions with a number of companies in the gaming sector regarding potential consolidation opportunities.  As all such discussions remain at a preliminary stage, there can be no certainty as to whether or not such discussions will result in any form of transaction.”

While they will not comment on who they are in discussions with (entirely), this news has caused a ripple of optimism within the industry and from investors.  PartyGaming have admitted that talks are being held with sports betting rival Bwin: And Many believe that should a deal between Bwin and PartyGaming go ahead the figures involved would be around £2billion.  A merge with Bwin would certainly put Party­Gaming in a dominating position within online sports betting: 888 Holdings – Sportingbet  and Sweden’s Unibet are all believed to be looking into consolidation .

Since that press release to the London stock market company shares have been on the up – everyone hoping a bidding war will evolve.  There has been much speculation with regards to the online bingo industry since it hit the nation like a tornado only a few years ago.  And it does seem that PartyGaming have always realised the potential – PartyGaming referred to the online bingo phenomenon 2yrs ago as “The Perfect Storm” – And for them it does seem that all is ‘as it should be’.  However, for some smaller operators the storm has been far from perfect.

Undoubtedly, with so many of the smaller operators finding it difficult to survive it does seem likely that consolidation is the answer: Strength in numbers so to speak.  Although should Bwin and PartyGaming consolidate, it might be more a case of keep your friends close and your enemies closer!  It has not been revealed whether PartyGaming are buying or selling – they may simply be offloading some of their brands in order to concentrate efforts.

The online gaming industry is a relatively new sector and according to Numis Securities’ analyst Wyn Ellis consolidation is – on the whole – inevitable for most:  A way to cut operational costs and therefore remain competitive.  Ellis believes that a Bwin:Partygaming consolidation would provide them with the best slots, bingo and sport betting book around: “The strategic logic is very strong … It fits together neatly”.  Indeed, we shall see….

Tagged as: Bingo Scotland, Foxy Bingo, Think Bingo