Leading online gambling operator bwin.party has spun out its payment processing division into a standalone unit in a drive to generate more money from non-gambling businesses.
Kalixa, known as CQR Payment Solutions when an integral part of the bwin.party business, officially launched this week, with chief executive Ed Chandler saying its offer would “disrupt” the usually complex and costly payments process “by removing the excess links in the value chain”.
The division, which began life as bwin’s payments unit back in 2001, processed 40 million online transactions worth €2.6bn on behalf of more than 300 companies last year, with 85% of this volume accounted for by bwin.party’s in-house stable of online brands such as bwin, PartyPoker, PartyCasino and Gamebookers.
The company confirmed its strategy to grow out the Kalixa business last month as it unveiled a disappointing 2% fall in pro-forma revenue and 17% fall in profit (EBITDA) for 2012, blamed on the flat revenue and increased gaming taxes, most notably in its largest market of Germany, which generated 23% of its revenues last year. A 17% decline in poker also offset solid performances in sports, casino and games.
Company CEO Norbert Teufelberger admitted the group formed of the 2011 merger between bwin and PartyGaming had been hindered by ongoing integration efforts, but said the newly merged platform would be at “full power” by the end of 2013.
The company’s shares however rallied in February and March on the back of positive regulatory developments in the US state of New Jersey, where bwin.party has a B2B deal in place with Borgota owner Boyd Gaming. It also recently launched casino and poker skins on behalf of social gaming giant Zynga, expected to deliver revenues for the company as Zynga transitions to real-money on Facebook and sets to work on converting its huge audience of virtual currency players.
Article written by Peter Holmes
