Gambling software firm Chartwell bets on online poker, bingo: CEO

TORONTO (CP) - Online gambling software firm Chartwell Technology Inc.'s plans to grow with the burgeoning Internet poker and bingo markets remain on track, but it's also positioning itself for wireless gaming, the company's CEO said Wednesday.

"We intend to stay focused on what we've been doing and how we've been doing it, because we absolutely believe that our technologies and the business model we use to exploit them are the future of online gaming," Darold Parken said in a conference call with analysts.

"That doesn't that we're not going to try anything new - we're keenly aware of the potentially explosive growth opportunities in things like poker, bingo, mobile and kiosk gaming and we're making significant investments in all of those areas."

Shares in the company (TSX:CWH - news), which makes software for the so-called "I-gaming" industry retreated Wednesday from previous-day gains on the Toronto Stock Exchange, falling 70 cents or about eight per cent to $8.

That followed a gain of 60 cents to close at $8.70 on Tuesday, before Chartwell reported lower profits but higher revenue in the latest quarter.

The Calgary-based company said late Tuesday it earned $934,000 or five cents a diluted share for the three months ended April 30. That compared with a profit of $964,000 or six cents a share for the same 2004 period.

Total quarterly revenue rose to nearly $3.9 million from $2.9 million.

Industry estimates vary on just how fast the Internet gambling market will grow, but most estimates see its revenues rising from about $5 billion US this year to more than $14 billion US in 2006. In 1996 it pulled in about $30 million.

The industry is also starting to see a stable regulatory framework emerge. In April, Britain became the first G-8 country to enact a law regulating online gambling, a development cheered by the industry as an indication it is gaining acceptance.

Traditional casino games such as blackjack, craps and roulette have been online gambling's mainstays, but a recent upswing in the popularity of poker - driven in part by a growing interest in televised big-money championships - been a boon to I-gaming.

Following poker's rise is an "under-exploited" upswing in the popularity of online bingo Parken said.

"Several sources are predicting that online bingo will become the next online poker," he said. "We're hoping that's the case, obviously, and we're positioning ourselves to capitalize on that opportunity, should it arise."

Gambling via cellphone is seen as the next step for the online gaming industry, but has yet to emerge as a major market segment due to technological and regulatory hurdles. Early attempts at launching wireless gaming have seen some success in Europe.

Parken said he considers Chartwell's mobile technology "one of the best-looking gambling applications that you can find on a mobile phone right now. The challenge for us is to figure out how to best commercially exploit the application. . . but we're certainly working on that."

Chartwell also intends to widen its too-concentrated customer base this year and next to reduce the volatility of its revenue stream, and expects that no single customer will contribute more than 10 per cent of its revenue in fiscal 2006.

The company also said Tuesday its total assets rose to $29.3 million from $11.8 million in the same 2004 period. Recently, the company acquired Micropower Corp., a Gibraltar-based developer of online poker software.

http://news.yahoo.com - 2005-06-16 02:45:18