Paradise Lost

[jetset]

PARADISE LOST FOR SPORTINGBET

Resources will be focused on alternative Boss Media platform

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, maximising liquidity whilst reducing the complexity of running two seperate 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 maximise 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 stregthened partmership will enable the two companies to work together to bring second to none e-Gaming products to the market."