Australian online casino Lasseters is thriving, according to its net profit report for the 2004 financial year, with the company claiming a 25.6 percent profit increase due to "significant cost savings".
The company announced a net profit of AU$402,604 this year, compared to a profit of AU$320,485 for the year ending June 30, 2003.
Lasseters claims to be Australia's only licensed and fully regulated online gambling site - by the Northern Territory government - with the majority of their customers coming from US, as providing online gambling services to Australians is prohibited by the Interactive Gambling Act (2001).
The company attributes the gains to a 16.5 percent reduction in the cost of "expenses ancillary to ordinary activities" and a "modest" increase of its earnings before interest, tax, depreciation and amortisation (EBITDA) of AU$48,845 to AU$2,596,520.
Managing director of Lasseters, Peter Bridge, said the result was "satisfying" as the company had faced many international obstacles in the 2004 financial year.
"While externally we were subject to a range of issues outside our control, we have internally continued to develop the most efficient and low cost mode of operation," he said
According to Lasseters, the four main external issues that affected its business in 2004 were the tightening of credit card restrictions for gambling use by some US based financial institutions; the introduction of online gambling advertising restrictions in the US; the uncertainty of a revision to Australian online gambling law; and rapid appreciation of the Australian dollar discounting the value of US generated income.
Lassters said the rise in the Australian dollar was a "major contributor to a fall in revenue to AU$14.6 million in 2004 from AU$18.4 million in the 2003 financial year".
"We have now adapted our business plan to overcome these issues and so have gained confidence in our approach to 2005," Bridge said.
The company said its' most radical cost savings change in 2004 was due to the "provision of hardware and software".
Lasseters switched software providers from Access Gaming Systems to Online Gaming Systems, which facilitated the new gaming software "FIRE". The company said the new software increases the "capacity, flexibility and reporting" of the Lasseters Web site and saved them more than AU$1 million in software usage fees.
The company also purchased the hardware for use in its Alice Springs IT centre it said, producing per annum savings of AU$1.2 million in rental and maintenance costs.
Bridge said the resolution made by the federal government in July of this year not to further the restrictions on the Interactive Gambling Act also lets the company expand its business.
"We can now develop our business with the knowledge that there are no additional restrictions placed on our international operators," he said. "We are progressing a strategy of product diversification to expand in markets outside the US and generate a broader revenue base."
Bridge said the expansion will include the launch of a number of online gambling sites targeting countries other than the US. He adds that the most advanced plan of action is the formation of a "virtual company" in London, designed to "take advantage of the more favourable financial and regulatory environment in the UK".
"The UK-based company is scheduled to commence trade in December this year and will qualify Lasseters to seek merchant provider status with local providers," said Bridge.
"This will reduce our exposure to the US dollar and enhance the geographical diversification in the markets given that Lasseters has a wide international base of online gamblers."