PartyGaming Annual Profit Slumps 56 Pct.

[NoChance]

Here is an interesting tidbit.

I do QA for a small department in Wells Fargo online bill pay. Upper management told us a few months ago they would be opening a department in India for outsourcing. One of the guys who sits next to me will be managing this department. Anyway, he knows I play online and one day he approaches me and tells me that over half of the applications he received listed Party Poker QA as their last job reference. That was interesting. They must have done some HUGE downsizing.

[kidpokeher]

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over half of the applications he received listed Party Poker QA as their last job reference.

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I hope they don't hire any of them.

[frommagio]

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I dont see how a 56% drop can be explained by just the US being gone for 2 months

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Remember the big Monster overlay that they generously paid out? That's part of it; they lost money on that, not even counting the fixed upfront costs of advertising and program development.

[cardcounter0]

I notice none of the financial experts in this thread saw that REVENUE was actually up 12%.

[SammyKid11]

I haven't read the article and rarely fully understand corporate business reports as I only have interest in small business. But, what about all the worldwide advertising they did when they decided to concede the US market? They'd already paid for TONS of ads that ran post-UIGEA, and didn't get anything in return for those ads. But in addition, they had to light a fire under the ad campaigns for a TON of other countries if they wanted to stay competitive...which they've done.

As poor as we sometimes find them at certain aspects of their business, PartyGaming is actually a pretty shrewd company IMUO.

[Instyle007]

It didn't mention when compared to what period. My guess is that when comparing 2005 to 2006 revenue rose 12%, because in the first 10 months of 2006 they were taking truck loads of money to the bank.

As the next few financial reports come out, it'll show the real impact shutting out US players has had on them.

Before the bill, they were making somewhere in the ballpark of 2.6 mil of gross revenue per day.

Now they're at 1.3 mil per day, this is according to a priliminary report on their corporate website http://partygaming.com/images/docs/0...lts_FY2006.pdf

[bilbo-san]

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everyone cashing out should not mater for PROFITS. Only effect would be a 3-5% fee for payment processing.

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I'm surprised no one else has called you out on this, and everyone is coming up with weird ass indirect ways to explain it.

More people cashing out = less people playing = less rake = less profits (and this includes not just the US but those in other countries who cash out because the business in the US gave them a bad feeling). It's that simple.

If you don't think the number of people with money online is pretty strongly correllated with the profits, remind me not to hire you as an account manager if I ever go into the online poker site business [img]/images/graemlins/smile.gif[/img]

[cardcounter0]

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More people cashing out = less people playing = less rake = less profits (and this includes not just the US but those in other countries who cash out because the business in the US gave them a bad feeling). It's that simple.

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Would you want an Account Manager that could point out that Revenues were actually up by 12%? I think a good Account Manager would be looking at the decrease in profits as an effect of expenses and not the simple More People Cashing Out theory.

[fraac]

The market answers the original question. Party Gaming were down a few points after announcing results, but not much. So, not a surprise.