Casino props up poker at PartyGaming

Falling player yields and an increased marketing spend led to a 52% drop in H1 2010 poker profits at PartyGaming with casino profits outstripping poker by 283%.

Despite a 5% increase in player numbers, player yields fell to a record low of €6.7 a drop of 15% on the previous year with bonus payments up to 25% of gross revenue.

PartyPoker has managed to hold on to its position as the third largest poker site in the world, but the cost appears to be a savage reduction in player values and an increased churn rate.

PartyGaming said it was now attracting an increasingly casual player base to the site with only 16.9% of players remaining active on the site after 12 months.

A marketing push in Eastern Europe kept player sign-ups at 263,500 for the period, but net revenues fell 10% and the number of players still active after six months was down to 22.4%.

PartyGaming said the 'comeptitive nature' of the online poker market was the main driver behind falling revenues, but the World Cup as well as a strategic decision to increase bonuses were also factors.

'While poker was impacted by the football World Cup and remained difficult from a competitive perspective, our other verticals continued to perform strongly,' Jim Ryan, PartyGaming CEO, said.

The firms new French poker network will be hugely important for future profit growth, and Ryan said its marketing spend in the region could have an impact on margins in the second half of the year.

Casino revenues were a stark contrast to poker with a 23% rise in net revenue, albeit with a 3% drop in profit due to a major TV advertising spend in the period.

Despite the big offline push player sign-up numbers actually fell 10%, but yields rose by 20% and average daily revenue rose by 23% as the firm focused on higher value players in its casino division.

Casino revenue are now the main driver of the PartyGaming business, and its profit contribution was nearly three times that from poker.

Bingo profits were €7.2 million due to the acquisition of the Cashcade business, while sports betting profits showed an impressive 240% rise in profits to €3.4 million.