Annual Report & Accounts 2009 - Report of the Chief Executive
REPORT OF THE CHIEF EXECUTIVE
Introduction and financial overviews
In 2009, though trading conditions were difficult for the industry as a whole, the Gaming VC Group
continued to grow revenues and perform well. Group revenue increased to c54.0 million, and 7.7%
compared to 2008.
Like for like sports revenues grew 44% from c6.3 million to c9.1 million from a hold of 17.9% (2008: 13.4%).
Gaming revenues excluding Betboo were 2.5% lower at c42.7 million (2008: c43.8 million). Betboo revenues
amounted to c2.2 million for the six months since acquisition.
As explained more fully in the report of the Finance Director, the profit before tax was affected by two noncash
items arising from the Betboo acquisition totalling c1.1 million and exceptional charges of c1.5 million.
Clean EBITDA, at c17.4 million (2008: c19.5 million), was c2.1 million lower than 2008 as a result of our
continued expansion into new business lines with lower margins and increased marketing spend on the
mature CasinoClub business.
During the year CasinoClub revenue fell by 18.8% to c29.6 million and contribution in this area of the
business fell by 20.1% to c20.6 million. The contribution margin remained at 70%. The core German casino
business has been affected by challenging economic conditions which in turn effected player yields, in
particular at the VIP levels. The board is encouraged that the volumes have stabilised in the latter part of 2009
with H2 revenues only dropping by 3.3% compared to H1. Jon Salmon, ex-Head of Marketing for Party
Gaming, joined the Group earlier in 2010 and increased marketing investment is planned for 2010 to support
the CasinoClub brand. The board is confident of the prospects for this business in 2010.
Betaland enjoyed a year of significant growth in 2009 and moved into profitability with total revenues
increasing by 56% to c20.8 million; a sports betting margin of 17.9% was achieved (2008: 13.4%). During
2009, 21,845 new funded accounts were created (2008: 15,153) and 4.2 million bets were taken (2008: 3.5
million). The board is pleased with the continued progress that Betaland has made in the year. Within only
two years, the business has become profitable. The recruitment of Jim Humberstone, ex-Head of Sportsbook
of Sportingbet, who joins the Group on 19 April 2010, further strengthens our sports betting management
team. The board is confident that revenues and profits from our European sports betting operations will
continue to grow and expects to launch additional language versions in H2 2010.
Betboo, a Latin American e-gaming portal, was acquired in July 2009. The management team responsible for
the success of the business has all been retained. Betboo to date has had minimal marketing invested into the
brand but marketing will be increased in the second part of 2010. The business is expected to grow materially
Winzingo is a Spanish facing bingo site, focussing on the Spanish market. The business is a small part of the
business and results have been disappointing to date. A review of the business is currently being undertaken.
Unlike the majority of other listed gaming entities, the Gaming VC group has never taken bets or wagers from
residents of the USA. The Group has licences in Malta and Netherlands Antilles.
The Interstate Treaty regarding gambling in Germany was passed on 1 January 2008. Inter alia, this states that
"Public games of chance may only be organised or arranged with the permission of the competent authority of the
respective Federal State. Organising and arranging them without this permission (unauthorised game of chance) is