Saturday, Dec. 2, 2006

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Sportingbet, Plc. U.S. business sale costs company £241 million

By Erin Warner

Sportingbet, Plc. has posted first quarter losses of £241.4 million after selling its U.S.-facing betting and casino businesses for $1 when the country passed new online gambling laws.

The British gambling company blamed the loss on the £252.3 million shut-down costs associated with selling the businesses and banning U.S. residents from playing at Paradise Poker.

There were some encouraging numbers in the first-quarter results released on Friday, however. In the three months prior to Oct. 31, SportingBet reported an increase in gross profit up to £31.7 million from £21.4 million the previous year.

As well, Paradise Poker's daily revenue remained stable after ending U.S. real money play in mid-November. European and Australian markets also showed considerable growth.

"These results do of course contain a significant contribution from the now discontinued US-facing business," said SportingBet CEO Andrew McIvor in a release. "Our ongoing European and Australian business and non-U.S. Paradise operations have performed very well."

The company is now realigning its cost base to reflect its reduced size.

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