Interactive Gaming Holdings yesterday bought Londonbased fixed odds bookmaker Premier Bet in a reverse takeover.
Interactive paid £1 million in shares and convertible loan notes for Premier Bet, which runs an internet and phone betting operation, specialising in soccer betting. Premier Bet does not accept bets from US residents.
It has over 36,000 registered users and recorded betting sales of £24.7 million in 2004.
Interactive said enlarged group will have annual sales of over £25 million.
"Premier Bet has a great brand and offers customers a specialist betting experience which we intend to cross-sell to customers of Heathorns and our other e-gaming portals," said Interactive chairman and chief executive Thomas Taule.
"We also intend to leverage the Premier Bet brand name to expand into other sports and segments of the market.
"This, combined with the adoption of a more risk averse trading strategy, should enable both betting revenues and the gross win rate to be increased."
Meanwhile, internet gaming software provider World Gaming reported a 68 per cent drop in pretax profit, from £2.15 million to £682,352 in the six months to end June.
Turnover almost halved to £2.8 million from £5.5 million.
World Gaming said the revenue decline was wholly attributable to changes in its relationship with online betting group Sportingbet, which came into effect on October 1 last year. Under the terms of the companies' agreement, World Gaming no longer charges royalties to Sportingbet for use of its software.
World Gaming added that its gross margin for the quarter ending June 30 was 68.7 per cent down from 95.6 per cent the year before, and for the first half was 70 per cent compared to 92.9 per cent the previous year, the result of a change in accounting policy.
The company said in the second quarter - seasonally the industry's least busy period - it had concentrated on pursuing new licensing opportunities and implementing software and hardware upgrades.
Chief executive Daniel Moran said: "We are delighted with the results of these efforts which have resulted in new licensees and greater system speed and capacity."