Europe not a sure thing for Sportingbet

Gambling site Sportingbet.com has turned in a quarterly profit for the first time ever.

However, even though revenues in the region have been positive, the company doesn't expect Europe to be a major part of its business.

The company is based in the UK but attracts most of its revenue from the US and Asia.

Sportingbet's third quarter results show a healthy pre-tax profit of £4.8m, with analyst predictions indicating a year-end pre-tax profit of £5.8m growing to £38m by year-end 2004.

Despite the good news, trading on the London Stock Exchange saw the company's share price fall by 11 per cent to 137.25p.

One cause of the slump is the company's admission that its markets outside of Europe will always remain its strongest. In the UK and across the rest of Europe it faces very stiff competition.

McIver's view is that while there might be a lot of competition, it's not necessarily doing any better than Sportingbet. He added: "We don't think the high street names are doing too well online in the UK."

According to McIver, only three countries in the world have betting shops on the high street - Belgium, Ireland and the UK. As such the company's most significant success is in Asia, as punters have chosen to make wagers online, rather than with dodgy dealers on the streets.

Dan Stevenson, analyst at Jupiter MMXI, agreed that the real online betting markets are outside Europe. However, his money is on the big brands such as Ladbrokes and William Hill having the greatest potential on this side of the world. He told silicon.com: "If anyone can do it in the UK it will be the bricks and mortar companies with their household brands."

Despite its weakness in the UK, Stevenson concludes that Sportingbet appears to be a promising company with all the right ingredients for worldwide success.