PartyGaming Plc., 888 Holdings Plc. talking about merger

Two of the largest online gambling companies, PartyGaming, Plc. and 888 Holdings, Plc., have entered into discussions about a possible merger after taking considerable hits to their share prices after the United States passed legislation effectively banning them from serving U.S. customers.

The two companies are in the early stages of talks, and 888 Holdings, Plc. has said there is no certainty that the discussions will result in an offer being made or any other action.

A merger between the rival companies would create a £1.6 billion online gambling company.

The Unlawful Internet Gambling Enforcement Act (UIGEA), which prevents U.S. banks and other financial institutions from dealing with online gambling companies, has forced many companies to close down their U.S. operations. The result is that many companies, like PartyGaming and 888 Holdings, are looking to consolidate operations and merge customer service and marketing functions to make them more cost effective.

Both sites own and operate various online gambling businesses including PartyGaming's PartyPoker.com and 888 Holding's Pacific Poker.

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