Shares digital

Sportingbet (SBT:AIM) – Interims PTP: £2.2m (-£11.4m) Divi: n/a (n/a)

The online betting group continues to perform well in the post-US ban era. It has been nearly 18 months since internet-based gaming operators were forced out of North America. Chairman Peter Dicks has returned to office after resigning in September 2006 following his arrest in the US on charges of illegal gambling.

The focus is now on Europe and Australia, the latter split by high-stake, low frequency phone customers and high margin, low-stake internet users.

Sportingbet considers itself to be a retailer, selling bets rather than physical goods. Marketing is therefore at the centre of its expansion plans. Customers are being encouraged to make multiple bets in single transactions. This month sees an additional 2,000 football ‘products’ added to its system, giving sports fans the opportunity to bet on over 5,000 different football scenarios. A big push on sports betting will be made in the run up to Euro 2008.

Secondary to sports betting is gaming, which is run by third parties. Casino and gaming revenue increased by 16% to £14.8 million in the six month trading period. Poker slipped 33% to £10.7 million in the six months, but actually grew by a similar amount between Q1 and Q2.

It is spending up to £11.2 million on buying out its Bulgarian marketing partner, having already made similar moves to bring promotional work in-house in Scandanavia, Italy and Turkey.

There is still no significant progress in talks with the Department of Justice over US gaming. Sportingbet, alongside other players including PartyGaming (PRTY), want reassurance that they won’t be prosecuted for taking bets from US gamblers before an effective ban in 2006.

Shares says: Regulatory uncertainties are weighing over the share price, but for those accepting the high risks, it is worth a punt on Sportingbet continuing to flourish.

by:Dan Coatsworth