Gambling giants strike deal on reporting rules

The most powerful companies in the online gambling industry have agreed to undertake a collective overhaul of their company reporting in a move aimed at standardising the sector's disparate accounting.

At a special summit held in Gibraltar last week, PartyGaming, 888 Holdings, Ladbrokes, Sportingbet, CryptoLogic and Carmen Media Group agreed to implement a universal set of key performance indicators (KPIs) that will provide comparable reports in the sector.

The largest groups will now disclose their cost per player acquisition, real money sign-up takings, unique active players and yield per unique active player.

Analysts said the move from the leading internet gambling companies marked a huge stride forward for the industry.

‘We have been striving for sometime to get online gaming companies reporting on a similar basis. It is good for the industry that the biggest groups have agreed,’ said Andrew Lee, a PartyGaming analyst at Dresdner Kleinwort Wasserstein.

Lee said the most important outcome of the summit was that the companies would not only use the same KPIs but also calculate these KPIs consistently.

‘The KPIs have to be done on a comparable basis. We don’t just want disclosures of revenue per customer, but revenues per customer across all the products,’ Lee said.

The host of the KPI summit, Martin Weigold, the group finance director of PartyGaming, said that the agreement would enhance ‘understanding of the industry’.

‘This will improve transparency and remove any confusion over reporting differences between online gaming companies,’ said Weigold.

BDO Stoy Hayward partner John Barker said the initiative showed that the industry was ‘maturing’.

‘The industry is developing rapidly and it is important that the reporting is in place so that people know what is going on,’ said Barker.

BDO Stoy Hayward, which audits PartyGaming, Sportingbet and 888 Holdings, took part in the summit, helping to bring the major players together.

The industry is now hoping to get smaller players to report under the new KPI regime. Lee said that despite the highly fragmented nature of online gaming, smaller companies were likely to follow the example of the industry leaders.