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18.03.2006 Amid the apprehension in some quarters as the annual "let's ban Internet gambling" season started in Washington, 888 released very positive results this week, and opined that banning legislation was unlikely to succeed. Chief exec John Anderson hailed the company's 2005 results as "cracking", commenting that he was "....definitely pleased" with the results and the success of the group's marketing efforts.
He has reason to be delighted; for the year ending 31 December 2005, 888 reported healthy pre-tax profits of US$50 million (GBP 28.5 million) compared with US$43 million in the year before.
Online poker played a significant role in producing the good news with the success of 888's Pacific Poker site, with Net Gambling Revenue for poker rising 179 percent to $109.8 million. This figure is due in part to the 2.3 million newly registered poker member accounts that were opened.
Anderson commented on the company's performance, saying, "We have announced record results today. We continue to grow whilst keeping our costs under control. Our company is more diversified both in products and geographically and we are in prime position to benefit from the industry consolidation that is inevitable... I am extremely proud of our brand and management, which will be key to our continued success."
Net gaming revenues rose 52 percent to US$271 million from US$177.9 million in 2004, with growth accelerating especially over the second half of the year. The dip in last week's share price occasioned by news of the Leach Bill HR 4411 passing the Financial Services Committee in the States proved to be temporary, with a fast recovery and even a slight increase.
Anderson is confident that the attempts to ban will fail. The company is "vigilant" and active in the lobbying arena, and he feels that as far as legislation is concerned, the political moves will ultimately end in regulation rather than prohibition. He said: "As far as legislation is concerned, I think it will end in regulation. I will not take bets from Americans on sportsbooks; as far as I am concerned, that is illegal."
Addressing regulation of the industry, Anderson said regulators were generally looking beyond merely granting licences and were focusing more on compliance and codes of conduct within the industry. The UK was leading the way by embracing the online sector in the 2005 Gambling Act - a move that 888 believes will create a "domino" effect throughout Europe.
The acquisition of a sportsbook is the next priority for Anderson, as his company moves into the second year of public trading. "I am looking for a non-US sportsbook. I haven't found one yet, but I am looking. As well as that, of course I am continually looking around, as I should be, for other things."
888 gained 5.3 million new registered member accounts in 2005, (compared with 4.7 million in 2004) of which 1.8 million were real-money member accounts (2004: 1.2 million).
Anderson said: "Poker is still expanding as an industry, so we are not necessarily taking away market share from elsewhere. There are still new players to be signed up."
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