Bingo.com Ltd, the West Indies-based operator of the online gaming community at www.bingo.com, has posted a net loss of $266,702 in the "challenging" second quarter ended June 30, up nine per cent from the corresponding period in 2008, and affirmed its determination to achieve profitability in the "coming quarters".
Its wholly owned subsidiary, Bingo.com Operations Ltd of Ta' Xbiex, launched an online gaming facility from Malta in March after being granted licences from the Lotteries and Gaming Authority. Bingo.com has just under two million registered users and offers multiplayer bingo, slot machines, and sweepstakes among other online games.
The group's second quarter gaming revenue stood at £957,040, an increase of 41 per cent from the second quarter in 2008 and an increase of seven per cent from the first quarter this year. Total revenue increased to $1.512 million for the second quarter, up seven per cent from the second quarter last year, and an increase of 14 per cent from the first quarter of this year.
The company's revenues are received in sterling but most of its fixed expenses are charged in Canadian and US dollars. Bingo.com said the large swings in exchange rates negatively affected accounts but rate volatility was "containable".
The company saw strong growth in its player base over previous quarters but the weakness of sterling against the dollar neutralised the gains. Costs had increased due to the Maltese gaming licence - particularly bandwidth and gaming taxation - affiliate marketing costs, and continued investment in search engine optimisation.
"The Maltese licence alone has not impacted results significantly," chief financial officer Henry Bromley told The Times Business from Anguilla. "It is merely one factor of increased expenses that did not exist prior to the acquisition of the gaming licence, and when compared to other quarters.
"By having this licence we are now able to advertise in the UK, our main market at the present time. This increased marketing also contributed to our increased expenses. These actions have resulted in increased player traffic. However, the UK market is becoming increasingly competitive."
Due to the increase in deposits, more deposit bonuses were granted - the initiative was deemed necessary for Bingo.com to be competitive with other portals and to build a large customer base as quickly as possible.
"A deposit bonus is granted to players when they make a successful deposit," Mr Bromley explained. "We currently have a first deposit bonus of 200 per cent of a player's deposit. This changes to 101 per cent on all subsequent deposits. This deposit bonus is granted to attract new players to our site and to remain competitive in the current market, where high deposit bonuses are not unusual. In addition, this bonus enables our players to play for longer and therefore have greater enjoyment."
Asked about Bingo.com's outlook for the rest of the financial year, Mr Bromley said: "We hope to continue to grow by increasing our player base and our deposits and therefore hope to achieve profitability over the coming quarters."
In a company statement, chief executive officer Tarrnie Williams explained that while traffic and revenues continued to increase, the competition in the UK online bingo market was intense and had resulted in a reduction of individual player values.
"We recognise that to capture a higher percentage of the online bingo market share and reach profitability we need to offer our players a unique gaming experience," Mr Williams said.