Shares in the Gaming World Offer Attractive Investment Opportunities

The fortunes of online gaming companies have continued their increase following sound share performances on both London’s Alternative Investment Market and the London Stock Exchange, as well as several European exchanges. We take the time to review the performances of some of the industry’s heavyweights between 1 September 2004 and 1 April 2005.

CES Software is a leading provider of sports betting technology to a host of sports betting companies. CES’s notable acquisition has been American gaming P2P firm SkillJam for an initial payment of 8 million U.S. dollars. The firm also partnered with BetandWin to establish Betbull, which listed on the Vienna Stock Exchange in October 2004.

Zone4Play has had a busy period, recently signing up to become the provider of mobile phone solutions Coral Eurobet Ltd and the partner of Two Way TV to launch two fixed-odds interactive TV services across the United Kingdom. Zone4 Play’s shares are traded on the OTC Bulletin Board; however the company recently announced intentions to list on London's Alternative Investment Market. Revenues increased by 127 percent during the second quarter of 2005 compared to the same time the year before. Gross profit for the first six months of 2005 improved 94 percent.

Unibet looked set to advance 2003’s 2.9 million pounds profit on a turnover of 144 million pounds when it listed publicly on the Stockholm Stock Exchange on June 8 this year. The company’s shares jumped over 40 points in their first week and have gone on to rise almost 200 percent on their original price. 40 percent of Unibet’s profit is derived from the Swedish gambling market.

In September 2004, Unibet launched a P2P poker service in 14 languages. Two weeks later, approximately 13,000 of the firm’s online betting customers had registered for the service and over 6,000 had participated in poker tournaments.

In late 2005, Unibet Group plc announced that its second quarter turnover of the year was 59.9 million pounds. Gross winnings equaled 9.2 million pounds for the second quarter and 16.2 million pounds for the first half year. Profit after tax for the second quarter increased to 2.8 million. Profit after tax for the first half year increased to 5.3 million.

Given the strong state of Unibet’s share price, analysts predict that the company could also be a take-over target for the Modern Times Group. Shares reached a record high on 7 March, 2005 when they hit 695 SEK. Unibet subsequently announced acquisition plans involving MrBookmaker.com, an online sports betting firm, for 75.9 million pounds.

One of Germany’s leading e-gambling operators, Fluxx.com provides horse-racing fans with a variety of horse-betting forums including horses.de; telewette and Jaxx.de. The company has a loyal customer base and extensive experience in the German market. A notable change in the way the company operates was recorded in 2004, when it applied to switch from a General listing to a Prime Standard listing with the Frankfurt Stock Exchange; stating that “In taking this step, we are signaling our intentions to the capital market in our capacity as a listed company…Following the successful restructuring of our company and its very successful stock market performance in 2004, we are convinced that FLUXX is set to capture the attention of domestic and international investors again. Accordingly, we want to respond by openly embracing greater transparency."

BetandWin’s total turnover from its sports betting and casino business in 2004 totalled 856 million pounds sterling. This year, a total of 49 million bets were placed at the firm’s site. Amongst the highlights for the firm this year has been the launch of Betbull, a new European online betting exchange in partnership with Fun Technologies, and a new poker facility called Poker Lounge. BetandWin also expanded their market presence in Scandinavia, Poland, Spain and Italy this year to complement their core markets of Germany, Greece, Turkey and Austria.

Swedish internet gaming firm Cherryforetagen AB announced in February that it had made the acquisition of online Scandinavian betting exchange, Betsson. Cherryforetagen has come a long way since its launch in 1940. Today the firm works on the development of traditional forms of gaming, whilst also investing in internet technology. The Group’s net sales increased over the third quarter of 2004 by 26 percent.

Thispublicly listed company on the Australian Stock Exchange recorded a turnover of $450 million in 2003. The firm is licensed and regulated by Australia's Northern Territory Government and was the first corporate bookmaker to be licensed in Australia. IAS now holds a second license to operate in the United Kingdom and has established premises there. In April 2004, IAS purchased 50 percent of the Gibraltar based Internet Betting Company PLC which operates betting exchange Swapbets.com.