Revenue rise in online bingo


$1.6 billion annual online bingo sales in prospect

The Bloomberg business news service had encouraging news for online bingo operators this week, reporting that giant, publicly listed gambling companies William Hill, PartyGaming and 888 Holdings expect sales from Internet bingo to increase in Europe.

Revenue from online bingo will rise more than 20 percent both this year and next, totaling about $1.3 billion by the end of 2009 and $1.6 billion in 2010, the research company H2 Gambling Capital, confirmed.

The online version of bingo has proven more resilient than other kinds of gaming as the worst recession since World War II restrains consumer spending, H2 director Simon Holliday told Bloomberg, explaining that bingo is 'the least mature' area of Internet gambling.

'Online bingo is in such an early growth phase that any recessionary impacts are outweighed by its newness,' Holliday said. 'This is often supply-driven demand. It relates to availability and how heavily things are marketed.'

A William Hill spokesman said net revenue for online bingo and 'skill' games like backgammon rose 50 percent in the first half of this (2009) year. The London-based company, which will soon be relocating its online operations to Gibraltar, expects bingo gross sales, which include players' winnings, to grow 50 percent in 2010 from GBP150 million this year, spokesman David Hood said.

Ladbrokes reported a 30 percent increase in online bingo revenue but declined to comment on its revenue forecasts for Internet bingo.

Gibraltar-based 888, expects to generate close to $100 million in annual revenue from bingo 'in a few years,' up from about $40 million today, CEO Gigi Levy said earlier this (August) month.

'Online bingo should not be smaller than online poker' in five years, Levy said. He predicted 'about 50 to 100 percent a year growth' for bingo in countries like Italy and Spain as the game becomes more popular.

Global revenue from online poker, less players' winnings, will probably reach $3.9 billion this year compared with $3.5 billion in 2008, according to figures from Isle of Man-based Global Betting and Gaming Consultants.

Meanwhile, live U.K. bingo club revenues will probably fall 17 percent to GBP 2 billion this year, hurt by the economic slump, an indoor smoking ban, and a tax increase introduced in April, according to a study by consultants Mintel International Group Ltd. published in April this year.

Bloomberg observes that the growth of online bingo has spurred expansion and consolidation in the gaming industry.

In July, PartyGaming acquired bingo provider Cashcade for over GBP 95.9 million. Time Warner Inc.'s AOL UK and Microsoft Corp.'s MSN UK have also launched online bingo sites in the past year.

'They're all moving heavily into online bingo," Wyn Ellis, an analyst at Numis Securities Ltd. in London, told the news agency. 'It really has been an area of very significant growth, particularly in the U.K.'

Female players are a major factor in the continued expansion of online bingo, with a growing demographic of female, 25 to 45-year-old players.

About 70 percent of registrants on Cashcade's large U.K. sites are females with the most aged between 25 and 45, Simon Collins, chief operating officer for PartyGaming's Cashcade bingo division, said.

The reach of online bingo partly depends on 'the breakdown of broadband internet usage,' which is higher among younger players, said Greg Johnson, an analyst at Shore Capital Group plc in Liverpool.

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