Sportingbet swings to a loss, shares fall

Wed Feb 29, 2012 9:39am GMT

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(Reuters) - British online gaming firm Sportingbet Plc SBT.L posted a first-half loss hurt by a drop in sports betting in its European segment, but said its third quarter had started well.

The company, which operates in three segments -- sports betting, casino gaming and poker -- said pretax loss for the first-half ended January 31 was 7.2 million pounds, compared with a profit before tax of 19.6 million pounds a year ago.

In Europe, the company's business was impacted by the disposal of its Turkish language website -- which accounted for 29 percent of European and Emerging Markets net gaming revenue, as well as by the ongoing recessionary environment in the region.

"Their two biggest European markets, Spain and Greece, were pretty weak, and with regulatory changes coming through, visibility for earnings from those markets is still quite poor," Peel Hunt analyst Nicholas Batram said.

Europe will host two major sporting events this year -- the Summer Olympics in London and Euro 2012 to be hosted by Poland and Ukraine.

"I think we can safely say that the Euro 2012 underpins our second-half forecast, rather than being additional to it," Chief Executive Andrew McIver told Reuters. "I reckon we'll take more on any match in Euro 2012 championships than the whole of the Olympics."

Sportingbet, which has more than two million customers in 30 markets across Europe, Australia, Canada, South America and South Africa, said first-half revenue grew 2 percent to 109.4 million pounds.

Amounts wagered grew about 18 percent to about 1.27 billion pounds, backed by an 86 percent surge in Australian sports betting that included benefits of its Centrebet acquisition, which was completed in August.

"We are watching the legal position (in the United States), and are talking to other American-based companies about possible joint ventures with them," McIver said.

Online gambling that has been illegal in all forms in the United States, got a boost from the Obama administration late last year through a Justice Department opinion, which cleared the way for U.S. states to legalize Internet poker and certain other online betting.

The company, which operates websites in 21 different languages, offers more than 8,000 different betting opportunities every single day, letting customers bet on everything from football to cricket to horse racing, and even darts and politics.

In 2011, Britain's biggest betting firm Ladbrokes Plc (LAD.L) engaged in takeover talks with Sportingbet, but called them off as the latter's online gambling business in Turkey was seen as a stumbling block to a successful deal.

Sportingbet subsequently sold off its Turkish operations in a bid to exit unregulated markets.

Shares of the company were trading down 9 percent at 38.25 pence at 0932 GMT on Wednesday on the London Stock Exchange.

($1 = 0.6314 British pounds)

(Reporting by Brenton Cordeiro in Bangalore; Editing by Roshni Menon)

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