888 Casino Buys Wink Bingo For $77 Million Dollars
The most recent acquisition deal in the gambling industry involves online gaming operator 888 buying Wink Bingo for a price tag of £60m ($77m USD). 888, which was previously outbid by PartyGaming for Cashcade, intends to have a bigger share of the UK market with the deal.
The acquisition terms involve upfront payment of £11m, with the rest coming from revenues until March 2011. Wink Bingo appears to be a good catch. The two-year company is among the top Internet bingo sites these days, with over 60,000 players.
888 chief executive Gigi Levy calls the deal a “lucrative” one, and at a “very reasonable price” at that. “Despite what some people think, there is a lot of room for growth in online bingo; we’re expecting 20 to 25 percent growth next year.”
Future of Wink Bingo and 888
Last November 30, Wink Bingo posted revenues of £15m (before tax of £1.3m) for the previous 11-month period. According to industry watchers, growth of the online bingo market is hinged on expanding its customer base.
According to Mr. Levy, online gaming was traditionally a game reserved for males before online bingo companies such as Wink successfully attracted a great number of women. “It is also a very social style of gaming—people really get to know each other online,” he added.
When the Bush government banned online gaming in the US, 888 shifted its focus to the UK market. As such, 888 sees Wink’s command of UK as aligned to their plans of maintaining its presence in the country—888’s biggest market today.
The recent economic downturn did not leave 888 unaffected. For the third quarter of last year, 888 posted a 10-percent decline in its operating income, quarter-on-quarter. According to Mr. Levy, this couldn’t have been prevented because the industry flows with the economic trends. 888 shares fell from 0.7p to 110.8p.
Fortunately, regulations and legislations in new markets are shaping the future of 888 and its competitors. Last November, for example, 888 declared its intention to seek a license to operate in France for 2010 as soon as legislation is legitimizing online gambling, although initially only for betting on sports events and poker. Ladbrokes Casino already is opening in Europe and PartyGaming has entered the casino market in Denmark.
The French Government is making this move in reaction to the European Commission’s prodding. Italy will follow suit by allowing bingo and casino games.
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