Gibraltar-based PartyGaming, the world’s largest online gaming company, announced last week that it has acquired the business and assets of Gamebookers, an online sports betting business, from Trident Gaming PLC for an estimated net cash consideration of EUR102 million ($130.4 million).
Established in 1999, Gamebookers provides online sports betting in 12 languages and has more than 250,000 registered customers in 140 countries and 53,318 active customers.
Significantly, the company does not accept bets from punters based in the US, where regulators are cracking down on illegal gambling.
“The acquisition of Gamebookers is an important step forward in diversifying PartyGaming’s business from both a product and geographic perspective," commented Mitch Garber, Chief Executive Officer of PartyGaming.
"Gamebookers is a well-established and profitable operator with proven risk management skills and scaleable proprietary software. We believe that sports betting will be a valuable addition to our integrated gaming platform, which we expect to provide excellent cross-selling opportunities for our expanding base of customers outside the US," he added.
The business offers single, combination and live bets on a wide range of international sporting events. In the 12 month period ended 31 December 2005, the business took over 25 million sports bets, equivalent to an average of 124 bets per customer per month, with an average bet size of EUR7.1. The business also operates a small but growing online casino, and recently added a poker room.
Gamebookers’ sports betting activities currently operate under an Antiguan gaming license, and the majority of the operations, risk management and customer services are run by a cost-effective in-house processing centre in Bulgaria.
In the year ended 31 December 2005, Gamebookers took wagers of EUR179.4 million net of bonuses, generated gross wins of EUR10.1 million, and produced earnings before interest, taxes, depreciation and amortization (EBITDA) of EUR4.6 million. PartyGaming expects the business to generate EBITDA of between EUR8.0 million and EUR9.0 million in the current year (before the benefits of cross-selling), reflecting the operational improvements made following a change of ownership in July 2005 and increased investment in marketing in the first half of 2006.
Gamebookers’ active customer numbers have been growing strongly and rose from 26,818 in the quarter ended 30 June 2005 to 53,318 in the quarter ended 30 June 2006, with the number of bets placed per month also increasing strongly over the same period.
The acquisition is expected to be earnings enhancing for PartyGaming in the current financial year.
A comprehensive report in our Intelligence Report series looking at conducting tax efficient e-business in Gibraltar is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report12.asp
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