Australian confidence

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AUSTRALIAN CONFIDENCE

Centrebet wagers on a Democrat change to online gambling laws

John Kelly, chairman of the Australian listed betting group Centrebet yesterday questioned whether the new US internet gambling laws would be effectively enforced under a new Democrat-led Congress, after he gacve a bullish indication that the company could exceed its 2007 financial year forecast.

Speaking at the company's first annual general meeting since listing in July, Kelly said that trading had started "strongly in FY 2007 for the four months up to October 2006 and we remain ahead of our forecasts".

The company finished the last financial year 8 percent above its prospectus forecast. Kelly talked up the company's prospects in the 2007 financial year, underpinned by what he described as "a defined strategy" of cross-selling gaming products to existing clients, mobile phone betting, affiliate programs and expansion into Spain.

Centrebet previously flagged a 2007 net profit after tax of $11.6 million. Kelly said he was disappointed the stock was not trading above its $2 issue price, blaming it on an excessive negative reaction to the new US Unlawful Internet Gambling Enforcement Act action legislation, "notwithstanding the fact that we have never targeted the US". He reiterated that Centrebet would not be affected by the US gaming laws, which prohibited banks from making or taking payments from locals with online gaming operators.

Kelly questioned whether the new gaming laws would stand under a Democrat-led Congress. "That legislation was enacted by a Republican Congress," he said. " Whether that legislation will be enacted when the new congress assembles will be a very different matter. One should not necessarily assume that things will stay the same in the US."

Kelly said that while being publicly listed made the company more vulnerable to a takeover, it too was on the look out for M&A "opportunities".

Managing director Con Kafataris revealed that Centrebet was in discussions with potential but unnamed partners in Asia.