Bwin.party says that talks to sell part or all of their business are becoming more serious, though there are still no details about what companies they are talking to or what kinds of deals are on the table. That news comes as the online gambling firm announced their 2014 financial results, which were disappointing thanks in large part to soft online poker markets in Europe.
According to non-executive chairman Philip Yea, bwin.party is still having discussions with potential buyers, but there’s no timeline in place or expectation of concluding talks any time soon.
“We’re testing them against each other and against business as usual,” Yea told the Financial Times. “These processes take whatever time they take.”
The talk of a potential sale started last November, when the company responded to rumors that there had been discussions between bwin.party and Amaya Gaming. At that time, bwin.party said that they were actually talking to “a number of interested parties,” though details have been few and far between on the nature of such talks. Speculation has continued to center on Amaya and British bookmaker William Hill as potential buyers.
Yea says that while such deals may make sense for everyone involved, it’s not clear if the online gaming industry’s biggest players are on board with big mergers quite yet.
“We think the industry has good reasons to consolidate,” Yea said. “But just because we’re ready to discuss it, it doesn’t mean everyone else is.”
Consolidation might look especially attractive from bwin’s perspective. The company released their 2014 financials this week, and the news wasn’t positive: revenues were down, mostly because of weakness in European online poker markets.
“We have made solid progress this year in growing our share of revenues from nationally regulated and/or taxed markets, including our mobile footprint and reducing our cost base,” said bwin.party CEO Norbert Teufelberger. “However, the full year impact of ISP blocking in Greece coupled with the structural decline of regulated poker markets in Continental Europe affected our overall financial performance for the year.”
Overall, revenues for bwin.party were down to â‚¬612 million ($647 million) in 2014, well below the â‚¬652 million ($689 million) the company brought in during 2013. That was largely due to a decline in their poker products: while they made slightly more per active player in 2014, the number of active player days was down a disappointing 31 percent. Interestingly, New Jersey poker revenues were actually seen as a positive for the company, helping to mitigate bad results in Europe and elsewhere.
The result was a bad year for bwin.party’s bottom line. While 2013 saw the company post a pre-tax operating profit of nearly â‚¬52 million ($55 million), the company showed a pre-tax loss of â‚¬97.9 million ($103 million) in 2014.
One way to help combat this in 2015 may be to increase mobile revenues. The company did well in getting customers to use their mobile services for sports betting, but were less successful on the poker and casino sides of their business. That meant that only 21 percent of total revenue came from mobile gaming, and Teufelberger wants this to increase to 50 percent by December.
That could help revenues from declining, but probably won’t spur growth: bwin.party admits that it’ll be hard to increase their business considering that they’re coming off of a World Cup year and dealing with the new point of consumption tax in the United Kingdom.