News

Tuesday, 10 May 2011 00:42

There was a huge buzz around the gambling community when one of the most prestigious domains, gambling.com went on sale last week.

For those involved in the business of online gambling, here was a chance to acquire what has to be one of the most relevant domain names there is. With its owner, Media Corporation group, which is based in the UK putting the domain up for auction, the stage was set for what could have amounted to a massive round of bidding.  

The online auction of the highly coveted domain name was held by domain auction experts Sedo, yet with all the interest and potential benefits of owning gambling.com, in the end the domain fetched a disappointing $2.5milion from an anonymous bidder based in the UK. Many experts were surprised at the unexpectedly deflated price it went under the virtual hammer for, especially considering that when Media Corp. acquired the domain as part of the takeover deal of Newbold for around $20 six years ago.

Media Corp. had placed a $9 million valuation on the domain in January this year, but accepted the highest bid in the auction. Their Chief Exec Justin Drummond said of the sale that he was pleased with the outcome. He explained that the domain's sale will boost the currently substantial cash reserves of the group considerably. That cash boost will provide financial resources to allow the group to pursue certain acquisition opportunities that they have identified as being highly beneficial in the Internet gaming and advertising space.

Many experts are speculating the reasons as to why the selling price for gambling.com was so low. Most tend to agree that the fall in online gambling opportunities in the United States were largely to blame. When media Corp bought out Newbold and obtained possession of the domain in the deal, the market for online gambling was still thriving in the US. In recent years, that market has steadily declined as the spate of federal arrests and domain seizures relating to gambling websites has increased.

Another reason for its lack of performance in the auction could be that in 2007 gambling.com was given a penalty by Google. This effectively saw it removed from the search engine's index, resulting in a massive loss in search traffic and a drop of around 60 percent in its gross margin. The penalty was lifted in 2009, but it has taken time to reclaim its performance in that engine's index and regain its lost traffic.

There have been several big price tagged gambling related domain name sales recently, with poker.org fetching $1 million and slots.com selling for 5.5 million. The record price for a domain sale is still held by sex.com, which fetched $13 million, while beer.com sold for a cool $7 million. What might beersexgambling.com be worth, I wonder?