No good will come of it

[peterbirks]

Party Gaming continues to be run by donkeys who don't understand online poker and who, as a result, are frequently the victims of the law of unintended consequences.

From this morning's interim management statement:

Poker revenue grew by 10% versus the previous quarter and 13% versus the prior year, with growth held back by the impact of changes made to the Group's PartyPoints loyalty programme part-way through 2007 that resulted in higher than expected fair value adjustments to revenue (14.6% of gross poker revenue in the first quarter of 2008 versus 11.4% in the comparable quarter of 2007). Our new loyalty programme was launched yesterday and whilst slightly later than planned, is expected to result in fair value adjustments to revenue reverting to previous levels by the end of the first half of 2008.

Which means, however you want to look at it, that players participating in loyalty programmes are going to get less back.

Of course, Party hasn't actually told the players that they are going to be fucked (and a 3 point cut is going to be a fairly lumpy hit). They just tell the shareholders and the regulators. So, do they expect the players not to be shareholders as well? The least they could do is to announce "changes" to the system, rather than hope no-one will notice.

Twats. Share recommendation. Sell.

Comments

Party Poker

[(Anonymous)]

Pete - just got an e-mail from these guys regarding my inactive account - unless I start playing again they are going to debit my account around $8! I suppose I should play the one raked hand and then close my account and ask them to send me a cheque!

JG

Re: Party Poker

[peterbirks.livejournal.com]

You have to generate 5 party points every two weeks to stop them taking 10% of your points. If you don't play in, I think, three months, they charge you for holding onto your money. The incompetence of this as a business model, basically exchanging long-term earnings for quarterly gains, seems endemic to any listed company these days. No-one running the company understands online poker properly. It's like the old betting shop period in the 1980s when the corporate guys took over from the old street bookies-turned betting shop owners. If the business is run by bean-counters, it will, eventually, go down the toilet. I always tend to sell a share where a chief financial officer becomes CEO (or, indeed, any CEO who is a qualified accountant). Someone who becomes an accountant just doesn't have the required world view to be a good CEO.

There is an obvious political parallel here as well, just in case anyone felt that they were being perceptive in spotting the Brown/Blair comparison.

PJ