Online Bingo is where the money is at - Cashcade sold for £71.9m
This almost passed me by, last week saw a pretty big announcement in the online gaming sector. PartyGaming acquired Cashcade for £71.9m in cash with up to a further £24m payable dependent on future profit performance. So just to be clear that’s almost £96m, a fair chunk of change by anybody’s standards.
For anyone not sure of who these companies are, PartyGaming is an online gaming operator whose brands include PartyPoker, PartyBingo and Gamebookers. They are a publicly traded company and can be found on the London stock exchange under the ticker PRTY. In the year to 31st December 2008 they generated revenues of $472.9m and profit (EBITDA) of $144.2m.
Cashcade is described in the press release as follows:
“a leading UK-based online marketing business specialising in bingo and casino games. As at 31 January 2009, Cashcade’s websites had approximately 2.2 million registered players and over 460,000 cumulative active players. Its core owned bingo websites include Foxy Bingo, Think Bingo, Cheeky Bingo and Bingo Scotland. Core owned casino websites include GetMinted and Foxy Flutter. Cashcade also supports the branded bingo and casino websites of three media organisations - Trinity Mirror plc, STV Group plc and Emap plc.”
What makes really interesting reading is the following line from the press release:
“In the year ended 31 December 2008, Cashcade generated net revenue of £44.9m (2007: £28.5m) and earnings before interest, tax, depreciation and amortisation (”EBITDA”) of £12.2m (2007: £4.9m) implying an acquisition multiple of 5.9 times 2008 EBITDA”
What this is saying in effect is that PartyGaming paid almost 6 x the annual profits for Cashcade. That’s a very nice multiplyer and goes a way to showing how competitive the online gaming sector is and the value placed on registered users.
What I also found very interesting was this article from Reuters where PartyGaming Chief Executive Officer Jim Ryan said that the global online bingo market is projected to grow in size to about $2.5 billion over the next four years.
If you stop and think about it, that is a staggering valuation, I can’t think of many other sectors that can match it. It’s for this reason that I recently relaunched Bingo.org.uk. The online bingo sector is so vast and competitive, and there is so much cash floating about, that I hope to sell the site once I get back on the first page of Google for some good bingo related search terms. The site is slowly beginning to gain traction now that I am feeding it with fresh content, so hopefully we’ll see some more movement up the serps soon. For now, £150k will get you the site 
What I’m listening to right now: The Perfect Chill
Friday, July 31st, 2009 at 12:53 pm and is filed under Affiliate Marketing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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[...] However, as I wrote about last year I know that the opportunity in the online bingo sector is massive and coupled with the generic nature of the domain name is the reason that I will be giving [...]
Welcome to my blog. My name is Kieron Donoghue and I am the founder of ShareMyPlaylists.com, ContentNow.co.uk and some other businesses. I thought it would be fun to blog, writing about my experiences in Internet Marketing. I'll include some personal stuff too, probably about my other passions, music and cars. Please feel free to post your comments and thoughts too.
Hi Kieron, I hope you are successful with your bingo website, and are able to turn a good profit of it! That would awesome for sure!
Till then,
Jean
When I started reading this post I immeadiately thought of your Bingo.org.uk URL. The nice thing about the .org is that you can use a charity aspect to really drive your bingo site, if you so wish.
That’s good news! Online gambling is really big, and I think many owners of these type of websites have a lot to look forward to. Dude, you are in a great niche.
Are you subtly suggesting 150k is 6 times your current profit on bingo.org.uk?
It’s actually not far off, if current revenue continues. But I am also factoring in the value of the domain name. Bargain
Congrats, that sounds very tidy! Out of curiosity, how do you value the domain name? Is there a science to it?
If you think aboout it £150k on a 6 x multiple is only £25k a year or just under £2,100 a month. Not a lot at all, I know tons of bingo sites that make much more than that. No, no science to domain name valuation at all. Pick a number
Its possible that the top affiliates are on £25k a month in online bingo.
…and them some. I know some guys who clear £50k to £100k a month from just one operator.
Hi Kieron,
I like your domain name. It is pretty cool. I wish to success in bingo.
I wish I could sell some of my sites at 6 times annual earnings! Good luck with your bingo site - it is a good domain. Actually - you seem to have a number of good domains - how did you manage to get them? Did you get them early on, buy them off somebody or manage to get them when they dropped?
Hi, believe it or not it was free when I went to register it. Paid about £3 for it
Wow! I really wish I’d thought about registering a lot of good domains when I started out in this 10 years or so ago - there were probably plenty of good ones around then!
I just assume now that all the 1 word domains have been bought up, no matter how good or bad they are, so never even look for them!
On that note Cheap Dvds guy… If we all knew what we know today… I am sure most of us would been billionaires right now =D, at the least millionaires for sure!
Till then,
Jean
Likewise, I also immediately thought of your bingo.org.uk site. First thing I did was to see where it was in Google - page 4. I can only assume you are getting your traffic from longtail words or via PPC. Good luck either way.
That’s lot of money. This is really a good vertical to focus on for the future. I’m going to register some domains now
I’ve got bingoheaven.org.uk if your interested in buying it? Send me a PM via the a4u forum if you are.
For all of us out there who promote bingo sites via affiliates etc this is great news. To think that online bingo isnt going to peak till 2012 is excellent.
Does anyone have any useful tips on how to get the other half off of bingo starts and how to concentrate on her bingo affiliate website?
The only downside for me is creating unique content and reviews of bingo sites as I don’t play it. Guess I should try outsourcing my content :-s