PartyGaming Sees Revenues Rise But Trouble Still Looms on Horizon

A 21 percent increase in revenues was announced at PartyGaming Thursday as the beleaguered online poker firm struggled to assure investors the future still looked rosy for a company that was once the biggest IPO of 2004 and the largest online poker room by a mile prior to passage of US legislation banning the activity.

PartyGaming, which runs the PartyPoker and PartyBets websites, said on Wednesday revenue in the three months to March 31 reached $128.9 million, with poker revenue up 13 percent and casino revenue up 45 percent compared with a year ago.

Its shares, however, fell 5 percent as analysts said the outlook for full-year growth was not promising in light of disappointing performance in the first four weeks of the second quarter.

"They are down in absolute terms in the beginning of the second quarter, which means that their full-year revenue is going to look like a bit of a struggle," Arbuthnot analyst Paul Leyland said.

Last week, Gambling911.com reported exclusively on how PartyGaming's founders were close to reaching a settlement ensuring they would not face future prosecution.  But that "settlement agreement" came with a steep price: Millions of dollars in fines and up to five years imprisonment.  PartyGaming's founders have insisted to close confidants any "settlement arrangement" would not be realized if it is to include jail time.

Meanwhile, PartyPoker continues to drop in the rankings among most "cash play" online poker sites, struggling to hold on to the number four spot after iPoker (parent company of Gambling911.com sponsor Chili Poker) is now sharing the number two spot with Full Tilt Poker.

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Christopher Costigan, Gambling911.com Publisher CCostigan@CostiganMedia.com

Originally published May 2, 2008 11:51 am EST