The Canadian online gaming group Intertain, looks to pull in punters with online bingo.
UK.- Intertain, the Canadian online gaming group hopes for growth in online bingo. The UK is the world’s largest online bingo market with about 3 million players, according to Intertain.
Last year, Intertain agreed to pay up to £375m for Jackpotjoy, which is fronted by the queen of cockney sparrows Barbara Windsor and claims to be the UK’s biggest bingo site. Currently, the UK makes up the bulk of Intertain’s revenues and it is preparing to move to the London Stock Market next month. The online gaming group hopes for a better hearing from UK investors than it has had in Canada. There the shares are about five times earnings forecast to December.
Intertain’s problem is that web-based bingo is a nascent market in the gambling industry. According to Britain’s Gambling Commission, total revenues from online bingo were about £130m last year. That compares with revenues of £3.6bn from all types of online betting and £12.6bn from all forms of gambling, betting shops, racecourse, casinos, the National Lottery and the rest. Even though online bingo is growing, it is not doing so as fast as other forms of online betting.
Online bingo has been dubbed soft gaming, like the National Lottery or scratch cards. Players are not high-rollers. They are mostly people in their 30s, staking a few pounds on a quick game whilst they use the chat rooms.
However, Andrew McIver, Intertain’s chief executive believes there is nothing soft about the business, as there currently are hundreds of sites and the technology is comparatively straightforward. McIver’s motto is “More people, more games, more interest and bigger jackpots.” Online bingo operators do not become rich from taking a share of bingo winnings. The battle is to win new punters at their desk or on a phone and persuade them to spend as much as possible in a few minutes on the sidebars of casino games and scratch cards. The problem is that it costs a lot to catch punters’ attention and does not take long to lose it.
McIver believes it is possible for a group with nearly 30 percent of the UK market and profit margins of well over 30 percent. “We have critical mass and the full suite of brands”, he says. On the other hand, Intertain, or Jackpotjoy as it will be called when it lists in London, lacks the track record to qualify for a premium listing on the London market. Revenues may have risen in two years, but investors will need X-ray vision to see through the share issues and £384m of debt raised to fund acquisitions.