News

Monday, 14 September 2009 01:32

Following the signing of a landmark deal for providing online gaming services for the US casino giant, Harrah’s Entertainment, 888 Holdings Plc watched its share prices rise sharply on the London Stock Exchange on Friday. Under the terms of the deal, Dragonfish, which is the B2B division of 888 Holdings Plc, will be supplying Harrah with gaming software as well as other services that will help it to make its grand entry into an already established and highly profitable UK online casino and poker market.

The deal has enormous further potential as it will also set both companies up for entry into the US market once the much hoped for law changes and new regulations have come about there.

As the day closed on Friday, shares in 888 had shot up 14.30 percent, to close at 99.4p, 14.1p up on the day. This is the highest point their shares have reach in 2009, following a gradual decline seeing their value drop to 22 percent below the mid-June price. It is that very kind of jump that has simply not been seen during the current tough economic period.

Precise financial figures were not disclosed, although 888 chief executive, Gigi Levy said that the agreement in the long term will be worth in the region of millions of dollars to the company. The deal is ground breaking in that it provides a foothold for the company in the US market in readiness for the changes that are expected to bring a return to online gambling there.

888 Holdings Plc has been busy with its B2B division's expansion of late. It's through this aspect of the business that they provide valuable gaming software to other companies. This offsets an often tougher trading climate in their consumer division. The effects can be seen from the reduction by 43 percent in pre-tax profits for the first six months of 2009 to $14.9 million with revenue falling 13 percent for the same period to $117.9 million. This fall was mainly caused by gamblers reducing their stakes along with fewer visits to the company's online casinos and poker rooms. 

While 888 Holdings Plc shares rose, other major UK gaming and online gambling related companies saw little change, with William Hill and Ladbrokes both only seeing a one percent difference in the value of their shares. PartyGaming remained stable with a two percent rise.