PartyGaming Reports Drop in Operating Profit

This week leading online gambling group, PartyGaming Plc, reported a 6.5 percent drop in its first-half operating profit, which is thought to be a result of pressures from the highly competitive online gambling industry, a drop in players and the $101 million in restitution it was forced to pay U.S. authorities.

As part of the restitution, PartyGaming agreed to pay U.S. authorities $105 million over a 42-month period, which was a great contributing factor to the company's first-half pre-tax loss of $66.9 million. This was in direct contrast to the same period last year, when PartyGaming reported a notable profit of $22.7 million.

The online gambling giant, which owns and operates top online poker room, PartyPoker, posted an operating profit of $60.7 million on its revenues, which was a drop of 21 percent to $201.3 million for the six months to the end of June this year. However, the firm has reported a turnaround in the last few weeks.

In the last three weeks to August 18, the company reported its gross daily revenue as $1.9 million, while the average number of active poker players on its website grew to around 51,000 per day. Said PartyGaming CEO, Jim Ryan, 'Currently, our poker revenue is stable and our casino sales are continuing to grow.'

Soon after PartyGaming released its results, its share price dropped 2.8 pence to 263.2 pence. But over the past year, PartyGaming shares have skyrocketed by 35 percent, giving the online gambling firm a value of $1.8 billion. And despite its results, PartyGaming made headlines this week with a new acquisition.