Asian ISP bets on gambling

One of the first Asian internet companies to list on the US Nasdaq market is staging a resurgence as an online gambling operator.

Taiwan-based Gigamedia started life as an ISP over cable TV lines in the late 1990s.

But, despite a promising start, growth faltered after Taiwan's former telephone monopoly took advantage of its existing infrastructure and connections to belatedly enter the broadband market.

Gigamedia is gradually moving out of the ISP business, and sold part of that division last year.

The company's new profits come from gambling and gaming websites, including poker and slot machine games, and multiplayer online games without a cash gambling element.

Gigamedia's revenues surged 88 per cent year on year to reach $40m in the second quarter. The company's profits more than doubled to reach $10m during the quarter.
"Growth was driven by increases in real money players on Everest Poker," said Gigamedia president Thomas Hui.

"Approximately 154,000 active depositing real money customers played Everest Poker during the second quarter, up 254 per cent year on year and 12 per cent sequentially.

"Approximately 54,000 new depositing real money players were added during the quarter."

The results are in contrast to many of the company's competitors in online poker which have seen "very weak quarterly performance", according to Traci Mangini of ThinkEquity Partners.

European gambling sites account for approximately three quarters of revenues. Gigamedia also operates online games in Asia, and is expanding its gambling operation in the region.

Although Gigamedia is listed on Nasdaq, US authorities have become increasingly fierce in their opposition to internet gambling firms, going so far as to detain executives of listed European companies while in transit through the US.