888.com: Business is Booming

After seeing its shares struggle after its September flotation, online gaming giant, 888.com, reported a 56 percent increase in third quarter revenue on Tuesday.

The timing was bad for 888 on going public, as PartyGaming had recently come out with the comment that online poker growth was moderating, hurting industry stocks. 888 Chief Executive Officer, John Anderson, believes that PartyGaming’s concerns were not necessarily applicable to the industry as a whole.

"As we said on the roadshow to all the investors who asked that question, I thought that it was a company-specific issue and not an industry-specific issue, and I think that has been borne out to be correct," he said.
"It depends what you mean by moderation," Anderson added. "Last year there was growth of something like 250 percent. There's no way in the world that that's going to continue, because 250 is a huge number. And if it did continue, in two or three years, compound-wise, we'd all be playing poker and nobody would be doing any work. But it's still very, very strong."
The 56 percent increase in revenue from both poker and casino games in the third quarter was a $25 million surge, to $70 million. The poker component of those figures jumped 178 percent to $29.5 million.

According to Altium Securities analyst, Greg Freehly, "This suggests that the online poker market is either growing more strongly than PartyGaming would have us believe, or that 888.com is taking market share, possibly both."

Interestingly enough, while 888 shares (888.L) saw a 5% boost in early trading Monday, the stock closed down 7p at 166p. Shares were down another 10p, on Tuesday.

Originally published November 2, 2005