Home / Poker News September 2008 / Party Poker at crossroads: will it prevail or will it fade away?
Party Poker at crossroads: will it prevail or will it fade away?
Posted by: James Carter. - Fri, 2008-09-05 14:39
When the numbers regarding Party Gaming’s first half revenues for 2008 came out, everyone connected in any shape or form with the company was thrilled. The $64.9 million (a revenue before taxes, amortization, depreciation and interest) surpassed even the wildest expectations. Analysts have broken down the numbers and concluded that the 76% increase compared to the same period a year ago was mostly due to increased casino revenues (up 38% from last year).
The poker branch has only registered a 6% increase in revenues, data which clearly points to the Achilles’ heel of the entire operation.
Party Gaming’s main problem is however, that despite the good initial results, the third quarter of 2008 is one threatening with a decline in revenues. Summer is a traditionally slow period with people vacationing away from their computer screens and online poker tables. Party Poker’s player traffic for July and August was 19% off the first half results. Revenues have also taken a 9% hit in August compared to July.
Is it all due to the summer season though? Party Gaming’s Chief Executive, Jim Ryan, decried the fact the poker rooms which still accept US players represent unfair competition for his company which tries to be as compliant with new legislation concerning online gambling and poker as possible. One thing is certain: Party Poker – a site which used to be THE absolute biggest – has taken a huge hit from the UIGEA in 2006. Even though it managed to keep an extremely attractive promotions system running, it has been struggling ever since.
It is also part of the package that Party Poker has failed to update its aging software, that it has taken an extremely rigid stance on issues like rakeback and it has kept its doors closed for skins and licensees.
Jim Ryan plans to address most of these issues through a “re-launch” of the site, focused on getting licensees and skins onboard. To that end, Rod Perry was appointed to non-executive Chairman, to take care of the site’s talks with the US dept of Justice regarding the UIGEA’s restrictions, thus freeing Ryan up to tackle some of the burning issues. Whether or not the re-launch will result in any attractive promotions and rake policy-changes for the players, remains to be seen…
