October 08, 2009

Sportingbet rises on boost from in-game betting

Sportingbet Plc rose the most since June after it posted a full- year profit and added live sports Webcasts with more betting during sports such as soccer and tennis.

Net income was 12.4 million pounds ($19.7 million), or 2.4 pence per share, in the year ended July 31, compared with a loss of 4.3 million pounds, or 0.9 pence per share, in the same period a year earlier, the London-based company said today in a statement.

Sportingbet is attracting more sports gamblers in Europe as it adds more betting during games and introduced live streaming of matches in November. Sports is now responsible for 64 percent of its net gambling revenue, up from 52 percent two years ago, as income from its poker sites declined due to competition, the company said.

“Sports betting is a more hardy, recession-resilient product offer,” Chief Executive Officer Andrew McIver said in a telephone interview. “We grow up with a sports heritage, where you don’t necessarily play poker in your youth.”

Sportingbet rose 5 pence, or 7.4 percent, to 73 pence in London. The shares have more than doubled this year, giving the company a market value of 353 million pounds.

Sportingbet said it will resume paying dividends, which were stopped after it was forced to close its U.S. operations in 2006 following a crackdown on Internet gambling in that country. The company will pay 1 penny per share for the fiscal year.

Sportingbet also said it will move to the London Stock Exchange’s Official List from the Alternative Investment Market over the next six months.

Net gambling revenue rose 13 percent to 163.6 million pounds in the fiscal year.

McIver said the company now offers 8,000 different bets on a typical day, up from about 1,000 a year ago. The during-game betting option allows Sportingbet to offer 35 different wagers per game per side for an average match, he said.

Soccer’s World Cup next June and July is riskier for betting companies such as Sportingbet than ordinary matches because all the action focuses on one or two games, rather than hundreds during an ordinary week, he said.

“You can win a lot as a bookmaker, or you can lose a lot,” he said.

In Greece, the company’s largest market, gambling revenue was up 56 percent, and in Spain, 11 percent, the company said.

U.K. revenue declined 21 percent because the market is so competitive, the company said. That revenue is up 10 percent so far this fiscal year as the company increased marketing spending, McIver said.

Sportingbet said it is involved in “constructive” talks with the U.S. Justice Department over the company’s U.S. operations prior to the country’s online ban. Its board said the company is optimistic of a settlement, yet couldn’t say how big or when it might come.

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