- Focus will be on regulated markets, less on marketing the dot-com product.
- Poker revenues declined significantly in 2012.
- 2012 bore the costs of platform integration.
- Belgium site to go live in a couple of weeks.
Bwin.Party CEO Norbert Teufelberger set out the company’s strategy in presenting results for 2012: less marketing spend on .COM, more focus on regulated markets, and a drive for “more on value and less on volume.”
Taking attention away from quantity makes sense given the continued weakness of poker in bwin.party’s portfolio. “Unique Active Players” have fallen from a post UIGEA peak of 936k in Q1 of 2010 to 597k in the last quarter of 2012. Daily revenues from poker are down €260k over the same period.
After tax the group ended up with a loss of €64.7m. Co-CEO Jim Ryan left in January, leaving Norbert Teufelberger alone to explain the weak performance and what he plans to do about it.
His upbeat explanation: “Most of last year was focused on integration. 2013 will be about completing this effort and transforming our business through innovation.”
The group has migrated its various clients onto a single platform which is used across all domains and in all markets whether regulated or not. There is no doubt that this was an expensive process, and during the year the company also picked up several new national regulatory licenses which incurred substantial costs as well as increasing tax liabilities.
In answering questions, the CEO indicated that he expected the new Belgian licensed site to go live within a couple of weeks.
The average yield per average player day is up slightly over 2011, but there’s no disguising the fact that total poker revenues have continued to slide. To account for the merger with bwin, the accounts provide two sets of figures. The “Pro Forma” figures assume the companies were merged for the whole reporting period and show poker revenue falling from €210m to €174m.
Over the year, Teufelberger explained that the group “has drastically reduced our marketing spend in .COM markets,” and plans to continue this diversification.
The shift in strategy is evident in recent moves at PartyPoker. In January, the top Palladium VIP level was removed as well as all bonuses that paid the equivalent of over 30% rakeback. This month they are “testing various features to make poker more fun and entertaining,” which has involved removing access for regulars to tables with predominantly weak players.
Mid year results gave a heads up for these changes when the company announced plans to “protect the poker ecology.” Players can also expect a major revamp of the poker client in the next few months.
During the conference call to discuss the results, Teufelberger was asked about his US strategy. In an illuminating digression he suggested that whether or not PokerStars received a New Jersey license would have a substantial impact: “It is obviously clear that if PokerStars is in the market, the opportunity will be smaller. If PokerStars is out, then it’s going to be, I would assume, very much between us and Caesars.”
Caesar’s industry body, the American Gaming Association, filed a hostile brief to the New Jersey Gaming Commission alleging that PokerStars is a “business built on deceit, chicanery, and the systematic flouting of U.S. law.”
This attempt to influence the license awarding process resulted in a vehement riposte from PokerStars.