ookmakers William Hill Plc, PartyGaming Plc and 888 Holdings Plc expect sales from Internet bingo to increase in Europe as the game catches on.
Revenue from online bingo will rise more than 20 % both this year and next, totaling about us$ 1.3 billion by the end of 2009 and us$ 1.6 billion in 2010, according to data from H2 Gambling Capital, a research company based in Manchester, England, whose clients include PartyGaming.
The online version of bingo has proven more resilient than other kinds of gaming as the worst recession since World War II restrains consumer spending, and as revenue declines in traditional bingo halls. Bingo is “the least mature” area of Internet gambling, Simon Holliday, director of H2, said in a telephone interview.
“Online bingo is in such an early growth phase that any recessionary impacts are outweighed by its newness,” Holliday said. “This is often supply driven demand. It relates to availability and how heavily things are marketed.”
William Hill said net revenue for online bingo and “skill” games like backgammon rose 50 % in the first half of the year. Sales at its outlets fell 1 %. The London-based company expects bingo gross sales, which include players’ winnings, to grow 50 % in 2010 from us$ 250 million this year, spokesman David Hood said.
Ladbrokes, the owner of more than 2,300 UK and Irish betting outlets, reported a 30 % increase in online bingo revenue while U.K. store sales fell 7.4 %. The company declined to comment on its revenue forecasts for Internet bingo.
888, which also offers sports betting, casino games, and poker on its sites, expects to generate close to us$ 100 million in annual revenue from bingo “in a few years,” up from about us$ 40 million today, CEO Gigi Levy said in an August 5 telephone interview from Tel Aviv. “Online bingo should not be smaller than online poker” in five years, Levy said. He predicted “about 50 to 100 % a year growth” for bingo in countries like Italy and Spain as the game becomes more popular.
Global revenue from online poker, less players’ winnings, will probably reach us$ 3.9 billion this year compared with us$ 3.5 billion in 2008, according to figures from Isle of Man-based Global Betting and Gaming Consultants.
Meanwhile, UK bingo club revenue will probably fall 17 % to us$ 3.2 billion this year, hurt by the economic slump, an indoor smoking ban, and a tax increase introduced in April, according to a study by consultants Mintel International Group Ltd. published in April this year.
“What we have found to date is that the two products tend to be viewed differently,” by players, Paul Tolboys, the Chief Executive of the U.K.’s Bingo Association, which represents bingo clubs, said in a telephone interview. Tolboys estimated that just “10 to 15 %” of bingo players play both online and in physical clubs.
William Hill and PartyGaming shares have done better than the FTSE 100 Index this year, rising 12 % and 38 % compared with 6 % for the UK benchmark. Ladbrokes declined 5.5 %, while 888 has fallen 20 %. The growth of online bingo has spurred expansion and consolidation in the gaming industry.
In July, Gibraltar-based PartyGaming, the owner of the PartyPoker.com online gambling brand, agreed to buy bingo provider Cashcade for as much as us$ 158 million. Time Warner Inc.’s AOL UK and Microsoft Corp.’s MSN UK have also launched online bingo sites in the past year.
“They’re all moving heavily into” online bingo, Wyn Ellis, an analyst at Numis Securities Ltd. in London, said in a telephone interview. “It really has been an area of very significant growth, particularly in the UK.”