Annual Report & Accounts 2016 - Performance of divisions
18 Performance of divisions continued
GVC Holdings PLC Annual Report 2016
Gioco Digitale was the first
fully-regulated gaming site on
the Italian market launched in
2009. It is positioning itself
as a gaming portal for casual
gamers, with a focus on bingo
and casino products.
Foxy Bingo was launched in
2005 and is one of the most
successful brands in online
bingo and is one of the biggest
names in the UK bingo market.
CasinoClub was originally
launched in 2001 and acquired
by GVC in 2004, it is a leading
online casino website for
with more than 15,000
partypoker is one of the
pioneers of the online poker
industry having launched in
2001. It remains one of the
industry's most recognised
brands, with a particular
focus on the UK.
partycasino is one of the
world's largest online casinos,
with 180 mobile games on
offer including many of the
classic casino games such as
blackjack, roulette and a broad
variety of slot machines.
GVC's key gaming brands include, partypoker, partycasino, Foxy Bingo,
Gioco Digitale and CasinoClub. Pro forma NGR was €203.5m in 2016
versus €211.8m in the previous year, with the change in constant currency
being 0%. Momentum improved through the year with pro forma NGR in constant
currency +4% in H2 over the previous year. Pro forma contribution from Games
Labels declined to €89.0m from €109.6m in 2015. The decline reflected a number
of factors including increased gaming taxes/VAT and investment in partypoker.
Historically, the Games Labels within the bwin.party business had been the most
challenged, in particular partypoker and partycasino. Our focus in 2016 was
to improve management, increase investment, enhance the product and the
It is therefore pleasing to report that despite continued structural challenges in the
poker market, partypoker NGR in 2016 rose 14% in constant currency, with the
growth in H2 over the previous year being 16% in constant currency. In December
2016 we reached a deal with one of Europe's leading poker rooms, Dusk Till Dawn,
to launch a new live global poker tour, partypoker LIVE which will feature the headline
tournament, the partypoker Million.
We also took the decision to restructure partycasino and separate the brand
from partypoker, repositioning the offering under a new management team.
Taking inspiration from CasinoClub, there is greater emphasis on VIP management
and reducing reliance on partypoker in terms of customer acquisition.
Significant improvements were made to the product and customer services before
relaunching the brand in H2 2016. This included the relaunch of the partycasino
frontend, enhancements to our live casino experience, the introduction of new
"Pro Series" table games and a number of technical improvements, such as
the dramatic reduction of game load times. As a result, along with increased
investment, partycasino saw a significant acceleration in new player acquisition
through H2, along with lower attrition and increased revenues per customer.
December was particularly strong and this positive momentum has continued
Foxy is one of the UK's best known online bingo brands but has had a challenging
few years. In the second-half of 2016 we brought in a new Head of Bingo and
significant work has already been undertaken to reinvigorate the brand and
customer proposition. New creative and media agencies have been appointed and
in March 2017 a new marketing campaign was launched with Hollywood actress
Heather Graham promoting the rebranded Foxy Bingo and Foxy Casino.
CasinoClub celebrated its 15th anniversary in 2016 with a series of events
across Europe. Through its heritage and bespoke club approach, CasinoClub has
established a leading position in German speaking markets and benefits from a loyal
customer base. Last year also saw the brand take control of its software platform
previously provided by a third party, while delivering a positive top line performance.
Gioco Digitale is the second largest bingo brand in Italy and a top ten casino brand
and is very much aimed at the casual player looking for entertainment. There was
some restructuring post acquisition, with improved marketing, promotions, CRM and
product. As a consequence, NGR grew strongly, particularly in casino.
All of our Games Labels are also benefiting from the many new content deals signed
over the past 12 months.
As with Sports Labels mobile revenue from Games Labels grew strongly in 2016,
and now represents 29% of divisional gross gaming revenue against 20% in 2015.
With further product enhancements and additional content we expect mobile
revenues to continue to grow strongly.
Looking ahead, the focus will be on continued product improvement across all of the
brands, along with improved customer service.
The improvement to product and customer experience across all of our games is
ongoing and supported by more targeted marketing, we expect further progress in
2017 and beyond. Furthermore, in addition to the significant amount of new third
party gaming content already secured, the Group is also continuing the development
of its own unique in-house products.
Sports wagers 65.2 77.1 (15) (14) 58.9 -
Sports margin % 7.7 5.0 7.7 0.0
Sports NGR 4.3 3.2 32 35 3.8 -
Gaming/other NGR 199.2 208.5 (5) 0 184.4 32.6
NGR 203.5 211.8 (4) 0 188.3 32.6
EU VAT (6.4) (3.2) (6.2) (0.7)
Revenue 197.0 208.6 (6) (1) 182.1 31.9
Contribution 89.0 109.6 (19) 82.9 21.8
Contribution margin % 44 52 44 67