Unibet wagers on legal US egaming with Bingo.com stake
Swedish operator Unibet has acquired a stake of just over a quarter of NASDAQ-listed Bingo.com in preparation for a potential opening of the US online gambling market...
UNIBET has acquired a stake of just over a quarter of NASDAQ-listed Bingo.com in preparation for a potential opening of the US online gambling market.
The Swedish operator took a 25.9% stake in the business by private placement worth US$2.25m (1.74m, £1.48m), which values the company at just under $10m and follows Bingo.com joining Unibet’s bingo and casino network in March.
Unibet chief executive Petter Nylander said: “We believe in the power of the Bingo.com URL and believe that Bingo.com will be a leader in online bingo for years to come.”
The deal was unveiled as Unibet today posted a 16% year-on-year (YoY) increase in first-quarter gross winnings revenue to £41.8m, from £36.1m in 2009.
Unibet’s strong performance was driven by a 23% YoY rise in sports betting gross winnings revenue to £17.6m, which Nylander said at this morning’s presentation in Stockholm represented “the re-emergence of sports betting as the key product for customer acquisition, cross sell and loyalty.”
Live betting and the mobile channel were the main drivers of this growth. Excluding free bets, live bets grew to account for 36.5% of gross winnings from sports betting, from 21.5% for the same period in 2009, and for 65% of the 350,000+ bets placed via Unibet’s mobile platform in the period.
Earnings before interest and taxes (EBIT), however, fell 3% YoY to £10.6m, from £10.9m. This was due mainly to a 19% YoY rise in marketing spend over the quarter to £24.9m, from 21.4m, because of costs associated with this summer’s football World Cup which starts in June.
The Swedish operator also confirmed its intention to apply for a licence under the controlled opening of the French egaming market, scheduled for June.
If successful, chief financial officer Henrik Tjarnstrom said “the EBIT contribution from France would only be only marginal in 2010″, due to the high tax on turnover and the absence of Unibet’s core casino product, which represented 34% of the group’s total revenues during the quarter.
However analyst James Hollins of brokerage Daniel Stewart said today that he believed that “the longer term benefits of higher-quality earnings and the ability to freely market are worth the short-term hit” of entering the re-regulated French online market.
Deal highlights during the period included a business-to-business deal with Paf, the gambling company of Finland’s semi-autonomous à land islands.