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Sunday, Oct. 8, 2006
Speculation helps PartyGaming stocks
By Sarah Polson
PartyGaming, Plc. stocks rebounded slightly in the latter part of the week after taking a 60% loss in value after news broke that the U.S. Congress passed legislation the Unlawful Internet Gambling Enforcement Act (UIGEA). The company's shares were up by 5p to 45p, or 12% higher, Friday morning.
The prices were bolstered by speculation of consolidation in the Internet gambling industry. PartyGaming, Plc. announced earlier this week that it was canceling its interim dividend payment scheduled at the end of the month in order to take advantage of possible acquisitions that may make themselves available in the next few months.
The company has already been in talks with Gamesys, a bingo operator that has all its customers in the United Kingdom.
Other companies may also be looking to consolidate and increase their business in other parts of the world. Another U.K. betting firm said it has received a number of informal approaches to take over the company as well.
PartyGaming, Plc., which owns PartyPoker.com and Empire Poker, had already been looking into other options to decrease its reliance on customers in the United States. The company recently acquired Gamebookers, a sports betting firm that has more than 250,000 registered customers from 140 countries and doesn't take bets from the United States.
It was also rumored to be one of the bidders interested in purchasing the Victor Chandler Group which owns VC Poker. However, Mitch Garber, PartyGaming, Plc.'s chief executive, later denied the rumor.
For more information about how Internet gaming company stocks have been affected by the U.S. legislation, please read UIGEA Causes Huge Loses in U.K. Internet Gambling Sector.
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