Punters move from the bingo halls to internet
Posted by Gavin Smith on 19 Jun 2009 at 11:06
While traditional bingo halls are struggling to survive, online bingo has become the fastest-growing form of internet gambling. Its attractions are such that the auction of Cashcade, owner of the popular Foxy Bingo and Getminted casino web brands, has sparked wide interest.
Cashcade, in which Independent News & Media has a near-20 per cent stake, is expected to fetch £70 million to £100 million, with PartyGaming, the PartyPoker owner, tipped to seal a deal in the face of opposition from 888 Holdings and Paddy Power, the Irish bookmaker. Cashcade, which has appointed Jefferies, the investment bank, to handle the sale process, recently reported a 91 per cent jump in revenues to £33.7 million, with pre-tax profits doubling to £10.9 million.
Its fortunes mirror those of the wider internet bingo sector, as punters look for alternatives to poker and casino games. The online bingo sector was worth $1.4 billion last year on a global basis. It is forecast to hit $1.7 billion this year and $2 billion in 2010. The UK accounts for about 20 per cent of the market.
Foxy Bingo, founded in June 2005, is the No 2 online bingo brand behind Gala.
The fear for Gala if PartyGaming wins the bidding for Cashcade is that it might lose its No 1 position as the internet gambling behemoth leverages its scale by cross-selling to its poker, casino and sports betting customers.
A victory for PartyGaming would also be a setback for 888 Holdings, which provides the software for Cashcade's websites and had been tipped as the early frontrunner. Inevitably, a victory for PartyGaming would see it lose the contract.
