The British online gambling group Sportingbet.com has had to make
some tough business decisions regarding its poker operations, culminating
this week in the announcement that it will effectively be closing
its Paradise Poker.com platform at a cost of some GBP55 million (US$107million).
The company intends to transfer Paradise players to its existing Boss
Media-managed Sportingbet poker platform. Facilitating the move, Sportingbet
has extended its contract with Boss for for a further three years
of both poker and casino services.
Explaining the numbers that led to the decision, Sportingbet CEO Andrew
McIver said in the three months to October 2006, rake from the Boss
platform amounted to GBP4.3 million, up 72 percent year-on-year. By
comparison, Paradise Poker generated rake of GBP3.8 million from non-US
players in the same period, up only 9 percent year-on-year.
Average daily active money players on both systems amounted to around
6 500, with yield per active player approximately 60 percent higher
on the Boss platform due to its bigger action.
"This deal combines all our poker players in one destination,
maximizing liquidity whilst reducing the complexity of running two
separate poker operations. The addition of the Paradise Poker players
to the Boss poker network will make the Boss network one of the largest
in Europe," McIver explained.
"By combining all poker players in one network we aim to
maximize yields," a spokesman said.
Sportingbet will retain the Paradise poker brand and migrate all Paradise
players to Boss "in due course" the announcement said.
The combination of the two poker businesses will provide some cost
savings for the group, however this will be offset to some extent
by the loss of revenue that may occur as a result of migrating players
from one platform to another.
Investor reaction to the move will not be long in coming - Sportingbet
will announce its results for the second quarter on 28 February.
The deal is good news for Boss Media. Johan Berg, Chief Executive
Officer said: "The partnership with Sportingbet is material
to the success of Boss Media and is one very important reason that
we are one of the leading providers of e-Gaming software. The strengthened
partnership will enable the two companies to work together to bring
second to none e-Gaming products to the market."