ESI loses big on U.S. online gambling ban

ESI Entertianment Systems Inc., owner of online payment solution company Citedal Commerse, saw a significant loss in revenue for 2006 due to the online gambling legal situation in the United States.

Canadian Press reported that the Canadian company based in British Columbia reported an annual loss of $5 million.

Though revenue actually increased by 19% in 2006 bringing the companies earning up to $22 million, it was a $6.2 million asset write-off that because of legislation against the industry in the United States that brought the company down.

Gross profits for the company also rose 41%, bringing them up to $13.5 million.

"These results before the write-off of the deferred assets truly demonstrate the strength of ESI's business model," Canadian Press quotes the company saying.

For the future, the company looks to expand in Europe and other e-commerce markets which will help make up for its loss of the United States.

ESI generates more than 90% of its revenue from Citadel, which provides an electronic check service primarily to gambling operators.

The company chose to cease its Citadel operations in the U.S. late in the financial year because of the uncertain legal situation in the United States when it passed the Unlawful Internet Gambling Enforcement Act.

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