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October 02, 2006

The Party Is Over at PartyGaming - Don't Come Back

posted by MR WAVETHEORY at 10/02/2006 02:56:00 AM

PartyGaming PLC
(LSE PRTY), the largest online poker gambling company is down 60% after the passage of the Internet Gambling Bill which was part of the Safe Port Act. A quick look below shows the extent of the carnage. Stocks are getting halved. PartyGaming is now persona non grata in the US.

SymbolTimeTradeChange% ChgVolumeIntradayRelated Info
888.L5:36AM ET97.00Down 49.50Down 33.79%8,406,160Chart, Messages, Key Stats, More
NLR.L5:36AM ET138.00Down 217.00Down 61.13%7,594,462Chart, Messages, Key Stats, More
PRTY.L5:36AM ET44.00Down 63.00Down 58.88%208,194,928Chart, Messages, Key Stats, More
SBT.L5:36AM ET79.29Down 104.96Down 56.97%32,594,482Chart, Messages, Key Stats, More

Wondering who owns them? Institutional investors like Goldman Sachs (GS) and Fidelity are the biggest owners of these stocks and have parked your retirement money in these names.

PartyGaming generates about 78 percent of its revenue from the United States, while Sportingbet gets about 62 percent there.

PartyGaming is shutting down US operations which account for over two thirds of its business.
"We're going to have to abide by the law,'' said John Shepherd, director of corporate communications for PartyGaming. "We're going to continue our push into markets outside the U.S. Poker and casinos have not been made illegal, but there is no way of collecting payments.''
888.com is also bailing.
"Things have become clearly illegal in the U.S., and I will not put my investors or my staff at risk,'' 888 Chief Executive John Anderson said in an interview. "We will step up a gear in terms of looking at the rest of the world. Most of the rest of the world is quite sensible in terms of regulation. If you look at the prohibition of booze in the U.S., gangsters made a lot of money from that.''
Yes, apparently, it was not clearly illegal. Love the logic. Since when has gambling been legal? This sounds almost like the dot-com story where venture capitalists chased dot-coms and held on until one by bone, everyone of them imploded.

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