Online casino gaming to reach more than $25 billion in four years
Research by Global Betting and Gaming Consultants, based in England, shows that online gaming, today worth $13 billion in gross gaming yield, is growing at a compound annual rate of 14 percent. In just four years, online gaming will represent nearly eight percent of all online gaming revenues across the globe.
Powering the trend – faster, broadband Internet connections, the continuing movement of consumers to e-commerce, and the emergence of newer games, like online poker. “Online poker is relatively new – compared to online sports betting,” said Mike Pacitti, a market analyst with ABN/AMRO, the financial services company, based in Amsterdam.
Leading online sites, Pacitti said, including PartyGaming.com, MainStreetVegas.com, and others, which are primarily attracting customers from the U.S. and Europe. As the Internet spreads in Asia, however, gaming fans there are expected to go online too. Pacitti said that broadband growth in China may be a major stimulant there for the gaming industry.
First quarter revenues surged at Gibraltar-based 888, the new, public online gaming company, as the casino and poker operator benefited from the rapidly growing interest in Internet betting.
The company, which went public in a £590 million offering – or $1.11 billion -- on the London bourse last October, said that net gaming revenues rose 42 percent to $84 million in the first quarter compared with the same period last year, with poker revenues of $39 million and casinos bringing in $45 million.
Recent additions to its poker offering in April are expected to drive further growth, and the introduction of casino playing via mobile phones earlier this month is also expected to see revenues perform.
In a confidential trading update to stock market analysts, a copy of which was provided to Onlinecasinocrawler.com, the company, managed by chief executive John Anderson, said its monthly poker “rake,” which includes its take from ring games and its tournament fees, had risen dramatically during March.
The group, what is more, increased its active users to 319,374 during the first quarter period, added that the 17-day World Snooker Championship it sponsored drove up its exposure in a market dominated by its far larger competitor, PartyGaming.com.
Cross-branding
Often, the online gaming sites are being used to cross-sell gamers to visit the physical sites – whether they be in Las Vegas or Macau, a special administrative region of China, where, for example, Wynn is building a new facility, aimed at international gamers.
Joseph Greff, a research analyst at Bear Stearns, the Wall Street investment bank, this week upgraded Wynn Resorts’ stock from "peer perform" to "outperform." The target price is set to $89.
In a research note, a copy of which was provided to Onlinecasinocrawler.com, the analyst said the company’s current valuation is “attractive in the light of its robust growth path” and the presence of several catalysts. Greff said that Wynn Resorts’ development plans on the Cotai strip and its Macau opportunities, along with the opening of the Spamalot resort in February 2007, are likely to raise entertainment casino revenues. These projects are “strong catalysts for the company over the next few quarters,” the analyst said. The company’s financial flexibility, and the strength of its balance sheet, are demonstrated, furthermore, by the receipt of $900 million in late-2006 related to the sale of the sub-concession to PBL, Bear Stearns said.
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