Casino Operators Standardize Revenue, Accounting Methods, Prepare for Regs

Wall Street analysts called the move a “major improvement” for Internet gaming campaigns, including PartyGaming, 888 Holdings, Ladbrokes, Sportingbet, CryptoLogic and Carmen Media Group, which all participated in the talks.

Similar Basis

 “We have been striving for sometime to get online gaming companies reporting on a similar basis,” said Andrew Lee, an analyst at Dresdner Kleinwort Wasserstein, who follows online gaming. “It is good for the industry that the biggest groups have agreed.”

These online casinos and poker rooms will now publicly disclose their cost per player acquisition, real money sign-up takings, unique active players and yield per unique active player.

 The Dresdner Kleinwort analyst Lee said these companies will use the same KPIs, and also calculate these KPIs in the same way.

 “We don’t just want disclosures of revenue per customer, but revenues per customer across all the products,” Lee said. “The KPIs have to be done on a comparable basis.”

According to Martin Weigold, the group finance director of PartyGaming, the agreement is going to dramatically enhance “the understanding of the industry. This will improve transparency and remove any confusion over reporting differences between online gaming companies.”

An accountant at BDO Stoy Hayward, John Barker, said the collaboration showed that the industry was rapidly maturing

Said Barker, “the industry is developing rapidly and it is important that the reporting is in place so that people know what is going on.”

The firm BDO Stoy Hayward audits PartyGaming, Sportingbet and 888 Holdings. Insiders say that the accounting firms helped the competitors reach an agreement on standards, and, now the industry is hoping to convince smaller players to report under the new KPI rules.

The stock market analyst Lee said that despite the highly fragmented nature of online gaming, smaller companies are probably going to follow the lead of the industry leaders.

Knowing exactly what the revenues are at online casinos will help boost an effort to regulate the industry, experts said. A study released recently shows that more than $3 billion in federal and state taxes could be raised if Internet poker was properly regulated in the U.S. alone, rather than banned, as one recent bill in the U.S. Congress would have it.

Researched by Judy Xanthopoulos, an economist with Quantria Strategies, LLC,  the study surveys the existing Internet poker market and demonstrates that the U.S. government could collect revenue if it were to integrate the burgeoning industry into the U.S. economy.

"Internet poker is an incredibly popular pastime for millions of Americans. Keeping Americans away from this game is not only unfair, but as this study shows, would be costly,” said Michael Bolcerek, president of the Poker Players Alliance, the gaming association. "This study validates that the benefits of regulating online poker in the U.S. far exceed the value of prohibiting the activity.”

The study only looks at the impact of regulation and taxation of Internet poker, but it supports the effort in the U.S. Congress to organize a federal commission to examine all online gaming and determine how best it can be regulated.

© Copyright 2006 Online Casino Crawler This material may not be published, broadcast, rewritten, or redistributed.