Less than a month after releasing their 2008 financial results, PartyGaming has published their 152-page annual report for stockholders. The report offers detailed analysis of the earnings in all sectors of their company, including PartyGaming’s largest division, PartyPoker. Amidst a generally gloomy economic climate, the report remained positive and realistic about company expectations for 2009.
The major theme of the report is an increased emphasis on the company’s online casino in 2009. The casino branch of PartyGaming saw a 22% increase in revenue in 2008, so the company is focusing their energies on acquiring new casino customers from sources outside of the poker room and obtaining more viable titles for slot machines and other online casino games. The introduction of movie-themed casino games based on franchises like Mission: Impossible, The Godfather, and Gone With the Wind was given a bulk of the credit for the increase in last year’s casino revenue.
In his letter to shareholders, Chief Executive Officer Jim Ryan outlined a 4-prong business strategy for PartyGaming in 2009, which included growing the player base, localizing the customer offer, broadening the product base, and acting responsibly. Ryan went on to explain the integral role a large base of regular customers plays in generating revenues and highlighted the overarching importance of both recruiting and retaining new players for their sites.
The shift in focus to growing their casino holdings does not mean the company has forgotten about PartyPoker. Their flagship brand is addressed repeatedly over the course of the report and, despite a drop in revenue from 2007 to 2008, the board of directors remained optimistic about PartyPoker’s future. Within the report, recently appointed Non-Executive Chairman Rod Perry offered the following remarks about the site:
“This Annual Report…highlights our ability to continue to advance in the face of challenging external factors. These include, at a macro level, a global financial crisis and highly volatile foreign exchange markets, and at a micro level the unlevel playing field in poker caused by sites that continue to take wagers from customers located in the United States, despite the enactment of the UIGEA.”
The report went on to elaborate on Party Poker’s 2008 performance, noting that in spite of the decrease in poker revenue last year, overall earnings were still up for the site as a result of streamlining of the administrative staff and a more focused marketing approach. Moreover, PartyPoker continued to hold steady at an 8% market share of the global online poker industry.
The report also offers a glimpse of what to expect from PartyPoker in 2009. The company plans on introducing monthly software updates designed to improve the ability for players to multitable. Emphasis was also placed on Party’s new training site, PartyAcademy.com.
PartyPoker pulled out of the U.S. online poker market in 2006 after the passage of the UIGEA, but the company is hopeful that Rep. Barney Frank’s upcoming legislation aimed to overturn the law will allow them to return to the largest online poker market in the world. The company is also looking into alternative business possibilities in the States. The report states that the company is,
“exploring opportunities to monetize the strength of the Group’s brands,in particular PartyPoker.com, through alternative business models that do not raise regulatory concerns under US law such as state-licensed intra-state online gambling.”
PartyGaming is publicly traded on the London Stock Exchange under the listing PRTY. At the close of business Wednesday, shares were trading at £240.50.