Casino pure play pays dividends for Party
PartyGaming's CEO Jim Ryan said today that the company's strategy to attract "pure play" casino players is paying dividends.
PartyGaming’s strategy to attract “pure play” casino players is paying dividends, the company’s chief Jim Ryan has said, as the company unveiled a 23% year-on-year growth in casino revenue during the first half of 2010 from 62.1m to 76.4million.
In a conference call to analysts this morning Ryan said: “If I take you back to 1 January 2008, 93% of consumers on PartyCasino were cross–sold over from PartyPoker. In the second quarter of 2010, 77% of PartyCasino players came from PartyPoker.”
Party’s CEO said this difference had come from going out and acquiring pure play casino players, “individuals who are solely focused on casino style games”. Other than putting less stress on poker liquidity Ryan added that this benefited the business as “the lifetime value of the pure play casino player is twice that” of a casino player who moves over from PartyPoker.
“If I take you back to Q1 2008, daily casino yield was 25.8 per player. In the second quarter of 2010, this was 40.2 per casino player. So we are making progress in this regard,” he said.
However, bottom-line earnings from casino were impacted by a substantial increase in marketing costs associated with above-the-line initiatives aimed at attracting these players, including TV and billboard campaigns featuring ex-England cricketer Phil Tufnell.
EBITDA dipped slightly from 25m to 24.3m and clean EBITDA margins to 31.8% due to “the impact of offline marketing costs”¦.as well as the receiving of a progressive casino jackpot”, said finance director Martin Weigold.
Party’s finance head said he hoped margins would improve in the second half of 2010 “as the benefit of this marketing expense feed through into revenue”, helped by “the addition of some casino games in Italy in the second half.”