By August Darnell | October 20, 2009

Publically traded online gaming company PartyGaming recently released the financial results from the third quarter of 2009 and while the news is good for the majority of the company with overall revenue up 11%, the online poker division, Party Poker, continues to struggle financially. Poker revenues were down 8% despite a higher number of players utilizing the site.

Total revenue for PartyGaming came in at $112.7 million, which is an increase from the second quarter, but down from the revenue for the same period of time in 2008. By comparison, this time last year PartyGaming had $117.7 million in quarterly revenue. The rise in earnings from the second to the third quarter in 2009 can be attributed, at least in part, to the addition of the newly acquired online casino venture Cashcade to the company´s PartyBingo holdings. Bingo revenue in Q3 2009 was up to $13.8 million compared to just $2 million in 2008.

PartyGaming Chief Executive Officer Jim Ryan commented on company performance in the official statement releasing the Q3 numbers. “Our strategy is to drive both our B2C and B2B offerings and become a top three player in all of our product verticals”, he explained. “Having launched sites on behalf of four new customers in the quarter, our B2B strategy is progressing well. The important fourth quarter has started strongly, as expected, and we remain confident about the full year outlook.”

PartyGaming saw growth in its sports betting, casino and bingo sectors, with the biggest jump in revenue coming from sports betting. The company´s online sports book, PartyBets, saw revenue jump 31% from the second to the third quarter with $5.1 million in earnings. PartyBets drew $4.2 million in revenue for the same period in 2008. The company attributed the sports betting success to a higher gross win margin, as the overall results for PartyBets were actually lower than the company desired.

Party Poker struggled the most during the third quarter of 2009, bringing in just $45.1 million compared to $65 million in 2008. While the online poker room brought in more customers thanks to increased marketing efforts and a revamped customer loyalty programs, the yield per customer dropped significantly in the third quarter. The yield per unique active player for PartyGaming overall was down 29% from Q3 2008 even though the number of unique players in the period was up 33% from last year.

Ryan commented on the struggles of Party Poker as well. “Poker remains challenging from a competitive standpoint, but we are encouraged by the increased player traffic during September and into October on the back of our new retention initiatives”, Ryan stated. The CEO has spoken about the current online poker market several times in 2009, noting the difficulty of keeping pace with companies like Full Tilt Poker and PokerStars which both still cater to US customers.

PartyGaming is a publically traded company listed on the London Stock Exchange under the symbol “PRTY.”

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