Online Casino News - Significant expansion for Gaming VC
28th of January 2010 - latestcasinobonuses.com
Casino Club brand to be expanded, together with a new sportsbook
The Isle of Man-based Gaming VC online gambling group said this week that it intends to implement a 'significant' expansion of its CasinoClub brand, together with an additional sportsbook offering targeted on new territories.
The tactics are in line with the company's ongoing strategy of geographic diversification, which is being supported by the key appointments of two industry veterans reporting to chief executive Kenneth Alexander, the company revealed.
CasinoClub will be expanded outside its core German market and into certain other markets. The expanded CasinoClub brand will be headed by Jon Salmon, the former chief marketing officer for Party Gaming plc and founder and former managing director of Ads Dot Com. Salmon has a successful track record of building teams and launching gaming specific marketing programs and brings in-depth gaming experience to Gaming VC; he will also be responsible for additional marketing spend to maintain the existing German business.
Gaming VC is additionally launching a number of new language versions of its sportsbook, targeted on Southern Europe and elsewhere. This launch will be headed up by Jim Humberstone, formerly head of sportsbook at Sportingbet plc, where he built up the European sportsbook product, regarded as one of the industry's most successful.
Chief executive Kenneth Alexander commented: "These two new management appointments further strengthen the senior team at Gaming VC and will enable the group to continue its aggressive expansion into new products and territories. In total, the group expects to invest up to Euro 7 million during 2010 to build the new businesses. Both businesses are expected to be loss making in 2010 but to make a contribution to earnings in 2011 and beyond."
Alexnder went on to explain that Gaming VC's strategy has enabled it to achieve a much broader portfolio of products than it had a year ago. "For example, the acquisition of Betboo in Latin America, the expansion of a sportsbook into wider geographic regions, the move towards more slots-orientated casino products, and also the usage of different software platforms," he pointed out. This changing mix has enabled diversification from the group's historical bias on German customers, and allows Gaming VC to market to a wider customer demographic.
Alexander also presented a trading update for the close of year 2009 and current trading.
* Net Gaming Revenues for 2009 were around Euro 53.7 million, up 7.2 percent (2008: Euro 50.1 million).
* Revenues from sport were Euro 8.7 million up 38 percent (2008: Euro 6.3 million), and revenues from gaming were Euro 45.0 million, up 3 percent (2008: Euro 43.8 million).
* Total average daily revenues in 2009 were Euro 142 000, with Euro 118 000 from gaming and Euro 24 000 from sports. The margin on the sports book for 2009 was 15.8 percent (2008: 11.4 percent).
* Revenues from Betboo averaged Euro 12 000 per day from 2 July to 31 December 2009.
Looking at current trading, for the first 24 days in January 2010, gaming revenues, averaging Euro 139 000 per day, are 15 percent higher than the same period for 2009 (Euro 120 000). Sports wagers for the first 24 days in January 2010 were 31 percent higher than the same period in 2009. Following a number of unfavourable sports results in this 24 day period, the hold was 8.9 percent (24 days to 24 January 2009: 15.7 percent).
The total cash position, including customer funds, at the close of business on Friday, 22 January 2010 was Euro 19 million (31 December 2009: Euro 19.2 million), of which Gaming VC's own funds represented around Euro 17.6 million.
"Despite challenging trading conditions within the sector throughout 2009, Gaming VC has successfully continued to deliver strategic growth in terms of enhanced product and geographic expansion outside its core German business, Alexander reported.
"The Group welcomes Jon Salmon and Jim Humberstone to its management team, both of whom are well respected executives in the e-gaming sector. Between them they have a wealth of experience as well as proven track records of delivering profitable growth in both casino and sportsbook. The group's stronger management team in Europe and South America is well placed to continue delivering on its diversification strategy.
"We acknowledge the importance that investors attach to their income and are committed to paying dividends. The Board believes that its increased marketing investment and growth plans offer shareholders the best opportunity to protect and enhance their longer-term income while the expected Special Dividend should offset the short-term impact of these plans."
While investors were still digesting the reports from Gaming VC, the company made a further announcement regarding management incentive packages, saying that it has entered into an agreement with its Executive Directors, Kenneth Alexander and Richard Cooper, for the cancellation of their existing vested share options.
Kenneth Alexander has agreed to cancel 566 667 options with an exercise price of 100p per share in return for a compensation payment of GBP 629 000 and Richard Cooper has agreed to cancel 108 333 options with a strike price of 126p per share in return for a compensation payment of GBP 92 000. The compensation payments reflect the current in-the-money value of the options being cancelled.
Gaming VC has also agreed to make one-off discretionary payments of GBP 643 000 and GBP 332 000 respectively to Kenneth Alexander and Richard Cooper, in addition to their normal performance-based bonus payments, in recognition of their importance to the business and their lack of participation to date in a Long-Term Incentive Plan.
It is expected that these payments will be accounted for in the year to 31 December 2010.
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