Numbers released for the first period of the year suggest that online casinos are weathering the storm of the current global economic downturn much better than their bricks and mortar counterparts.
When people are feeling the financial pinch one of the first things to go is vacations. This is an inescapable fact that has done a lot of damage to the destinations built on a gambling culture such as Las Vegas and Atlantic City.
While not doing as badly, real world casinos in other jurisdictions where the tourist aspect is not as important are also struggling. After vacations, nights out on the town are one of the next things to go out the window so it is really no surprise to see that these casinos are struggling as well.
Online casinos are down overall but by nothing like the same types of margin. Industry watchers suggest that, while the numbers are down, the online casinos are picking up the slack from gamblers who are not wanting to splash out on a trip or night out but still want to gamble.
It has often been said that gambling is recession proof. This time around has shown that if the recession is big enough then everybody is affected. Being a relatively new area of the overall industry, this is the first global downturn of this type of significance that online gambling has gone through.
One of the other factors that is serving the online casinos well is the fact that after the U.S. online gambling ban in 2006, they had to be very effective and savvy in all their business dealing just to survive.
When you take into account how these operations are weathering this downturn, how they survived the 2006 ban and the fact that that legislation is likely to be revisited in the not too distant future, the long-term prospects for the online casino industry look very good indeed
Nintendo has announced it’s intention to add a poker game to its ever expanding line of available games for the Nintendo Wii console.
The Wii has a much stronger following than all the other consoles among adults due to its off standard methods of controlling and playing games. Eschewing the traditional joystick or pad in favor of a much more physical rang of controllers that immerse the player in the game to a far greater degree than is possible by other means.
The more integrated nature of the interactions with the game will be a heavy selling feature for the new Texas Hold ‘Em application.
Apart from the physical playing experience, there will also be the added area of customization where a player can make use images of themselves to model their avatar inside to the game to look like them in real life.
The gaming console and related application market is an extremely competitive one and it will be very interesting to see one of the main players apply their technical know-how and marketing expertise in the launch of this potentially new area of gaming for the company.
Yesterday, Friday August 28th 2009 did not do anything to help a bad end to the week for 888 Holdings. The shares lost ground again yesterday but admittedly not by anything like as much the heavy drop from the Wednesday price.
The price of 88.45 was the share valuation at the day’s start and the value of shares stood at 85.50 at the conclusion of trading. This price is 1.46% down on the Thursday price of 86.75 and is a full 10.3% lower than the Wednesday’s price of 94.35
This drop is set against a backdrop of brisk trading with the real world volume over the course of the day at 1.17 M
The lowest point for the shares during Friday’s trading was 84.30 while at another stage 88.45 was the highest value.
This is a variance of 3.3% between low and high over the course of the day and in the afternoon it did seem like one of those trading sessions where would have been looking forward to the little breather that the weekend often provides.
Is the U.S economy about to become the best friend of online casinos? With the exception of one or tow notable voices such as Barney Frank, lawmakers have been very quiet on the subject of the difficulties that still surround the 2006 ban on online gambling in the United States.
That is, of course, is until the recession started to bite really hard. Now there seems to be a new soundtrack emanating from the corridors of power. It would not be a huge leap of faith to hazard a guess as to why this might be the case.
Money is powerful and the online casino industry has the ability to generate an awful lot of it. Also, it is a business that can be taxed heavily and politicians can make themselves feel better about this by saying that they are doing this in the public interest.
So we have an industry that is very profitable and can be heavily taxed without the general public ( read: voters) getting too upset about it.
When we couple that with the financial meltdown in public finances at both state and federal level, it is easy to see where all this more sympathetic noise is coming from.
Will it all lead to another look at the crude and ill-conceived 2006 ban? Ultimately, of course we will all have to wait and see but there definitely seems to be momentum gathering.
Shares in PartyGaming lost a little ground Thursday August 27th 2009
The losses were relatively modest but trading was brisk with the volume throughout the day settling at 824,193.
The valuation of the shares was 268.00 at the opening of business and by the end of the day 266.00 is where the shares stood. This leaves the price 1.69 percent down from 270.50 on Wednesday August 26th and is 1.87% lower than the Tuesday August 25th price of 271.00
To keep this in perspective, it’s important to remember that these drops came on the back of a very strong finish to last week. In a broader time-frame there have still been some fairly impressive gains in recent times.
Over the course of the day’s trading 272.95 was the strongest price for shares while during another period the low watermark for the shares was 263.90 thus giving 0.7 percent difference between high and low during the day.
Wednesday August 26th 2009 was a fairly good day on the Nasdaq for the CryptoLogic share price.
The share price bounced around a bit over the course of the day but settled well by the close of business.
7.15 was the share price at the opening of business and the price stood at 7.35 at the closing bell.
This leaves the price 2.4% higher than the 7.17 on Tuesday August 25th. On the other hand this price is 0.27% lower than the Monday August 24th price of 7.37. During the day’s trading the shares traded at a low of 7.00 and at another stage the high watermark for the shares was 7.36 that gives us a variance of 2.79 percent between low and high over the course of the day.
The volume of shares trades for the day came in at 151,273 so there was more interest in the shares than we have been seeing but still less than a lot of the consumer based industry shares in the sector.
The United States ban dating back to 2006 on online gambling is not the only legislation causing problems for the wider industry in the U.S.
While the precarious legal standing of online gambling is causing all sorts of problems for online casinos, it would seem that some of their offline counterparts are suffering badly with a ban of their own.
Illinois casinos are screaming loudly about the dent that the statewide smoking ban has put in their profits.
The casinos have employed a team of professional lobbyists to try to make their case. They are not trying to base their case on looking for sympathy. Rather, the main point they are trying to drive home is that the ban is not just affecting casinos, but is also having a very deep impact on consumer spending and the economy of the state as well.
They also have some compelling independent evidence to help make their case. Economists for the Bank of St. Louis Federal Reserve estimate that local and state government has lost approximately $200 million over the last year because of the ban.
That is a compelling figure by any standards and any available data so far would suggest that 2009 is going to be even worse.
From a global perspective, there have been precious few successful economic arguments that have had any effect on relaxing or repealing smoking legislation. That said, the numbers here are very big and we are right in the middle of the worst recession in 70 years.
It will be very interesting to see if the current economic circumstances combined with the losses to the wider state economy will have any affect on the legislation in this instance.
The stock of 888 Holdings had a very good start to the week on Monday August 24th 2009.
The value of shares was standing at 85.70 at the day’s start and 9.05 was the valuation of the shares at the close of business.
This is a significant jump and a stronger couple of days for the company than we have seen in some time now. The price is 5.6% up on the Friday August 21st price of 84.00 and a full 10% higher than the 80.00 on Thursday August 20th.
The interest in the shares was also reflected in the trading volume for the day. The number of shared traded during the full day settled at 1.15 M.
Over the course of the day the shares hit a high of 89.30 while at another stage the shares hit a low of 84.50 that gives us during trading, from high to low 3.90 percent difference.
Both Friday and today have been very good days for the shares. We have not seen the same kind of jump in other industry stocks.
The gaming division of Fremantle Media is looking to do deals with rights holders. The idea is to produce revenue producing games based on well known character from television shows, films and books.
This current push is focused on The United Kingdom. The company has already done similar deals with several companies in the U.S.
The biggest deal the company has put together so far is with MGM. This will see them producing games based on characters from well known brands such as Robocop, Stargate and The good, The Bad and The Ugly.
The desire of the company to aggressively develop this area seems to have come from the success of their American Idol game which outstripped all expectations after its launch.
There is also a game based on Baywatch on the way. Cross branding is a well established and commonplace practice in other areas of the entertainment industry as a whole but is still relatively untapped in the area of direct revenue producing games.
It will be very interesting to see in the coming months if the company can replicate their initial success in this area with other high profile franchises.
It would seem that online bingo is bucking the trend and beating the recession. While other games have seen their numbers drop to varying degrees, online bingo numbers seem to be up.
This information is correlated from data from several of the leading online gambling providers so it would appear to be an industry wide trend.
William Hill, 888 Holdings and Partygaming have all reported similar spikes in both usage and revenue numbers from online bingo.
From the available data, it would also appear that the rise has regional factors built into it as well with the largest percentage rise being in continental Europe.
One of the other striking aspects of this is that all the major online casinos are reporting a spike in revenue that does not keep with the spike in usage. The growth in usage is far larger. This would seem to suggest a social aspect to this phenomenon as well.
Earlier in the year we reported a rise in bingo on the Internet and all of this new data would seem to support the idea that this is not a short term fad but rather a long term trend. Online Bingo is here to stay and it’s only getting bigger.
