In the wake of the passage of online gambling legislation in the United States, some of the top businesses in the industry are still feeling its affects. PartyGaming, Plc. and 888 Holdings, Plc. have both been downgraded on the London Stock Exchange, while Empire Online is switching up its business strategies.
Starting on Wednesday, PartyGaming, Plc., owner of PartyPoker.com and Empire Poker, will be taken off the FTSE 100 index of the London Stock Exchange and moved down to the FTSE 250. It will take the place of 888 Holdings, Plc., owner of Pacific Poker, which will be moved down to the FTSE SmallCap index.
The move is a result of a dramatic drop in stock prices following the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) in the U.S. Congress last month, which prevents banks and other financial institutions from allowing people to use their money for online gambling. PartyGaming shares dropped more than 60% and 888 Holdings dropped more than 25%.
Empire Online hasn't taken as much of a hit on stock prices as some of the other companies in the industry, but it is still making adjustments. On Monday, the company announced that Lord Steinberg was stepping down as chairman of the board at the end of October and would be replaced by Richard Rosenberg, the current senior independent non-executive director.
The change also comes with a shift in focus for Empire Online, owner of Noble Poker and CD Poker, which plans to use its $250 million cash settlement from PartyGaming, Plc. to diversify its investments further away from online gambling.