By Kevin Felix | March 12, 2009

An earnings report released Wednesday by PartyGaming showed a 3% increase in overall net revenue for the company during 2008. The company, which is publicly traded on the London Stock Exchange, saw growth in its casino, sports betting and bingo ventures, but saw a 7% revenue decrease for Party Poker, the largest branch of PartyGaming. Party Poker’s net revenue dropped from $295 million in 2007 to $274 million in 2008. Despite what the earnings report described as a “soft performance” from their online poker branch, PartyGaming still managed to produce net revenue of $472.9 million last year.

A press release by PartyGaming attributed the drop in revenue for Party Poker to, “a reduction in the frequency of play, partly driven by a delay in the launch of a new loyalty program and competitive pressures from sites that continue to accept U.S. players.” Shortly after the passage of the Unlawful Internet Gaming Enforcement Act (UIGEA) in 2006, Party Poker withdrew from the U.S. marketplace and saw their stock prices plummet 60% in only 24 hours. Despite their removal from the U.S. market, yesterday’s report claims Party Poker still holds 8% of the global online poker market share.

The report also mentioned Rep. Barney Frank’s recent announcement that he would be introducing new anti-UIGEA legislation to Congress sometime this month. Should the legislation be introduced and passed, Party plans on trying to reclaim some of the 2 million real money customers they lost when they no longer accepted U.S. customers. Other upcoming plans for Party Poker include monthly updates to the software, changes in the multi-table tournament schedule and improved functionality with their multitabling feature.

While Party Poker’s customer base grew 3% in 2008, the daily average of players dropped 12% to 57,000 from 65,000 last year. The report suggests this drop stemmed from competition from sites who still accept U.S. players like Full Tilt Poker and PokerStars. It also goes on to posit that players are becoming increasingly more likely to remain loyal to a single internet poker site rather than divide their time between several different online poker rooms.

Party Poker may have seen a small decrease in their numbers, but the company’s new bingo venture nearly doubled its revenue from last year, going from $2.5 million in 2007 to $4.9 million last year. The company’s online casino also saw revenue increase 22% from $144.2 million in 2007 to $176 million in 2008. Part of the casino’s success can be attributed to the launch of several Hollywood-themed casino games, including slot machines based on “Mission: Impossible”, “Top Gun” and “The Godfather.” Party Casino typically draws heavily on Party Poker’s player pool for customers, but the revenue report discusses a new focus on casino marketing with the hope of drawing more dedicated casino players from places outside of the poker room.

After PartyGaming released the report, their stock prices, listed on the London Stock Exchange as PRTY, closed at £248, the highest it has reached since July of 2008.

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