BwinParty Numbers Stay Flat, Social-Gaming Unit Sale Planned

Gibraltar-based bwinparty closed its public books on a lackluster 2014 by releasing a pre-close trading update on December 1st that confirms the company has yet to reverse its lagging fortunes.

bwin-party-logoAccording to the latest numbers, bwinparty’s total revenue for 2014 is now expected to be in the range of €608 to to €612 million, suggesting that the site’s overall business has contracted another few percent in the second half of the calendar year.  Early this fall, bwinparty released its audited first-half numbers, which showed a total revenue of €317.1 million.  The year-end projections, then, indicate second-half totals of roughly €291 to €295 million.

A marked drop in online poker traffic was blamed a few months back as a primary culprit in the company’s poor fortunes, but is mentioned less prominently this time out.  Instead, the company in part blames plain old bad luck for some of the most recent downturn, in the form of less than expected margins from its bookmaking division. cited “an exceptionally weak gross margin in sports betting,” and attributed it to “the leading teams in several European leagues enjoying a strong run to the cost of European-facing sports books.” However, the company did not release specific profit numbers for its bookmaking operations.

Instead, the company noted the negative effects of two smaller division that continue to bleed money — the company’s moribund social-gaming division and its deep investment in the New Jersey (US) online poker market, neither of which has shown any signs of becoming profitable in the near term.

Win Interactive, the social-gaming unit acquired and reworked by the company in 2012 at a projected cost of €50 million, now appears to be abandoned and on the market for whatever the parent company can get in exchange.  According to the latest update, “We are in active discussions regarding the sale of Win, the Group’s social gaming business and expect to make a further announcement shortly.”

The company’s games, generally free-money versions of casino games, are available on Facebook and other platforms, but the company has had little success in monetizing its customer base.  The year-end update from claims the Win Interactive division is responsible for €7 million in corporate losses this year.

Also blamed for ongoing losses is bwinparty’s ongoing investment in New Jersey and the fledgling regulated US online poker market, which has grown much slower than initial, optimistic projections had claimed. has poured substantial resources into New Jersey, largely in the form of infrastructure and software development in support of its major New Jersey partner, the Borgata, but has yet to realize a profitable return on investment.  A reference to “clean EBITDA losses of approximately €10m from New Jersey” is indeed the only reference in the latest release to the New Jersey situation. also continues to explore potential mergers, acquisitions, partnerships and anything else that might turn around the company’s fortunes.  According to the year-end update:

Discussions with third parties

Further to the announcement made on 12 November 2014, the Group is continuing its discussions with several parties regarding a variety of potential business combinations with a view to creating additional value for shareholders. As previously announced, there can be no certainty as to whether or not such discussions will result in an offer being made for the Company. Further announcements will be made as and when appropriate.

It was last month (November 12th) that the company acknowledged entering into talks with “a number of interested parties” regarding a possible takeover of by another company.  Despite the company’s ongoing losses, the company’s share price has ticked upward slightly with the possibility of a takeover now in play.  At last check, shares of are trading at £1.18 on the London Stock Exchange.



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