Betfair chief executive David Yu has admitted the company is “concerned” about the post Bwin.Party merger future of Ongame, only eight months after moving its poker product to the network.
Speaking after announcing the exchange would move offshore and operate under a Gibraltar licence from tomorrow, Yu said that despite its poker revenues falling 20.5% in the third quarter of 2010, he was pleased with Ongame’s performance since Betfair migrated its customers to the network in July, but added he was “unsure what would happen” when PartyGaming and Bwin merge on 31 March.
The future of the network, a Bwin subsidiary, has been in doubt since the approval of the merger and after it was revealed that it will could be sold before the end of the year.“It’s a concern given the uncertainty,” said Yu, “but we’ll stay in contact with them and we hope it will work out for us and other licensees”.
Asked if he had a back-up plan should Ongame’s situation change, Yu said: “We think about what might happen, we have the necessary experience and understand how networks work, but we’ll have to see how it goes and react accordingly.”
Yu and CFO Stephen Morana were asked about the drop-off in poker revenues during a conference call with city analysts this morning, and admitted they were disappointed with the immediate aftermath of the migration from Betfair’s standalone poker platform in July.“Some of our higher-value customers didn’t make the move across when we migrated, but we remain of the belief it was the right thing to do for us,” said Morana.
Yu added: “We’ll have to continue to work to try get more of them [higher value players] either though enhancing the product and our offering or through cross selling. We’re a leader in sports through our exchange and we get a lot of great customers coming in through sports betting, so cross sell will become even more important to us.
“We’re not out of the woods yet. We need to get the right message across as our poker is now a better product with better liquidity post-migration.”