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Zynga Ready for Real Money Gaming or Trying to Hide Failures?888 is reporting poor numbers again and is pointing fingers at external factors. It’s the hip new thing if you’re a publicly traded gambling operation. Mostly it’s the “competitive” environment. I sort of hit on that trend in my post Why Smaller Poker Operators Should Shut Their Doors Right Now.
888′s CEO, Gigi Levy said that the reason for the disappointing earnings was:
The World Cup’s impact on poker and casino play (i.e. people quit playing)
Weakness in the overall online poker market
Currency fluctuations
That’s a hat trick of reasons. And yet, they’re all predictable. It’s not like nobody knew that this World Cup thing was going to draw players from some of their core markets. Hell, I wrote about it back in June. This is always a slow time of the year for online poker rooms and if you’re a European operator the World Cup is like kicking you while you’re down. But it’s entirely predictable and should have been forecast into their earnings projections.
And currency fluctuations can be hedged. Any large international business knows to hedge its currency exchange risk. That’s just the cost of doing business.
So, as a result, 888 said they were cutting their dividend and that there would be some “cost cutting” which is another way of saying, layoffs (or as the Europeans like to call them, redundancies). But, if you really believed that this was simply a perfect storm of conditions and that things were going to bounce back, why would you focus on cost cutting?
I don’t know, to me when you start cost cutting in a very competitive environment it sounds like you’re giving up.
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Hi, my name is Bill Rini and this is my poker blog. I've been blogging about poker and the poker industry since around 2003-ish. Like most people I started out playing poker as entertainment in home games whenever we wanted to sit around and smoke cigars, drink beer, and eat pizza, and needed a good excuse. I started playing online shortly after the first online card rooms opened and it wasn't long before I was playing 20, 30, or even 40 hours a week or more. One day I received a phone call about a program manager position at Tiltware which was the company that consulted to Full Tilt Poker on software development and marketing. After Tiltware I spent about 2.5 years working at Party Poker where I was the poker room manager.
