Thursday, October 28, 2004
I'll likely post tonight. But for now, here's the press release on Paradise Poker being purchased for 300 million.
Sportingbet Plc Acquires Industry-Leading Online Poker Brand, ParadisePoker.com; Deal creates world's first global online poker, sports betting and casino operator
LONDON--(BUSINESS WIRE)--Oct. 28, 2004--Sportingbet Plc (LSE: SBT.L), the world's largest publicly traded online betting, gambling and gaming company, announces the acquisition of ParadisePoker.com, a leader in the fast-growing online poker sector, creating the first global online poker, sports betting and casino operator. The deal brings Sportingbet's customer base to more than two million players and provides a popular online poker product to serve the rapidly growing online poker market in the United States and worldwide. ParadisePoker.com is the world's third largest online poker operator with a market share of approximately 10 percent.
Sportingbet acquired ParadisePoker.com for an initial consideration of $297.5 million, creating the world's largest online gaming business. Sportingbet itself today reported turnover of $2,620 million and an operating profit before goodwill and exceptional costs of $39.57 million for the 16 months to July 31, 2004. Sportingbet operates more than 30 brands in 200 countries across the world including its flagship brand, Sportsbook.com.
"Sportingbet's acquisition of ParadisePoker.com has a significant impact on both our company and the online betting, gambling and gaming market," said Alex Czajkowski, marketing director, Sportingbet Plc Americas Region. "Like Sportingbet's Sportsbook.com, ParadisePoker.com is a strong brand with a large and loyal customer base."
ParadisePoker.com's business model benefits from high operational gearing, due to its small, predominately fixed cost base. Operating costs relate largely to processing fees; personnel and IT costs are low relative to rake and tournament fee income. Discretionary marketing spend is the single largest cost incurred by Paradise. The financial model has historically resulted in Paradise generating both high operating margins (57 percent) and strong cash flow. In August and September 2004, Paradise's aggregate monthly rake and tournament fee income was $6.6 million and $7.0 million respectively.
ParadisePoker.com has over 721,000 registered customers and 97,000 active players. With strong site security, policies and independent auditors, it is a respected brand focused on integrity and quality. In addition, ParadisePoker.com regularly offers free tournaments where players can win a seat at some of the world's biggest televised poker tournaments.
Poker is one of the world's most popular card games, with an estimated 50 to 80 million players in the United States alone. The game has gone mainstream in recent years with the emergence of televised poker tournaments on ESPN, Bravo and other major cable networks, and become more popular with the presence of Hollywood players such as Ben Affleck, Matthew Perry, Leonardo DiCaprio and Carrie Fisher. Online poker has exploded in the last two years and remains a rapidly growing, dynamic and sustainable market.
Established in 1999, ParadisePoker.com was one of the first online poker destinations and the site now leads the way in this rapidly expanding online sector. It has dealt more than 500 million hands - the first single online operator ever to do this. Unbeatable site security has led ParadisePoker.com to achieve a strong reputation for integrity and quality, helping it to become one of the most popular and successful poker rooms in the world. The site is an exciting destination with a full range of poker games. Unlike online casinos, ParadisePoker.com does not participate in the games, but acts solely as the host, ensuring that play is both fair and honest.
About Sportingbet Plc
Sportingbet Plc is the world's largest online betting, gambling and gaming company. Since its creation in 1998, the company has helped to create a $6 billion industry and itself grown to become a $2 billion turnover business. Based in London, Sportingbet has a strong presence in the U.S., Europe and Australia, with 1.2 million registered customers in 200 countries. It has built a series of leading online brands in these key markets and offers a mix of sports betting, poker, casino and virtual games that traditional "bricks and mortar" operators cannot match. Sportingbet is listed on the London Stock Exchange.
Sportsbook.com, America's sports betting destination, is the flagship brand for the world's largest publicly traded online betting, gambling and gaming company, Sportingbet Plc. Sportsbook.com offers the largest online selection of sports betting, gambling and gaming. In Gambling Online Magazine's 2004 Reader's Choice Poll, Sportsbook.com was recognized with several awards including the Editor's Pick Gold Award.
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