• ONLINE GAMING IN CRISIS

    11 October 2006

    Newspaper

    ISLE OF MAN TODAY

    SHARES in the Island’s listed online gaming companies plummeted last week amid fears that a clampdown in the US could destroy the industry.
    Investors across the globe reacted to news that the ‘unlawful internet gambling enforcement act’ prohibiting US gamblers from using credit cards, cheques and electronic fund transfers to settle online wagers, was attached to an unrelated bill aimed at enhancing port security and pushed through the Senate by Republican senators.

    President George W Bush is expected to sign the bill into law within the next two weeks, after which affected parties will have 270 days to comply to the conditions.

    Neteller, the Island-based electronic payment provider, which relies heavily on the US online gaming market for revenue, saw its shares plummet from 355p on September 22 to 140p by last Monday, although they had rebounded to 165p by Wednesday. The shares were already in steady decline from a high of 840p in early April, buffeted by the worsening situation in the US during the summer.

    A statement to the City said: ‘The board believes that the act may have a material adverse effect on Neteller’s US facing business. Once the company has more information about what the regulations will stipulate, it will have a clearer view of which companies are affected, how those companies will be expected to comply and any possible resulting impact on the company.’
    Fairground Gaming shares fell 27.5p in one weekend from 45.5p on September 29 to 18p on October 3. They had reached a high of 124p in May, before dipping. Strong interim results two weeks ago had seen the share price rally, until last week’s news.

    In a statement to the City, Fairground said it was considering suspending business in the US.

    It said: ‘If so advised, the board will suspend participation by US based customers in activities covered by the legislation. In the six months to June 30, revenues from US players amounted to approximately 70 per cent of the group’s net gaming revenues.’

    Betinternet.com, the Island-based sportsbook, was not so badly affected, due to a lack of dependence on the US market. It is, however, suspending its US interests. Shares fall to 5.5p on October 2, a steady decline from a high of 12.25p on May 12.

    A stock market statement said: ‘Exposure in the United States market is negligible, with less than 0.2 per cent of the active sportsbook customers being from this region. In light of the passing of this Bill, betinternet.com has decided to suspend the small number of active United States accounts and will continue to block the opening of any new accounts from the US.’

    Douglas-based private companies such as Microgaming, the Douglas-based software company and online gaming firm Pokerstars do not have financial information available in the public sphere, but will no doubt be worried about the US situation and the uncertainty over future income streams.

    Outside the Island Gibraltar-based Partygaming, the largest company in the sector, took a beating on the markets. Its shares fell more than 66p in one weekend, from 107p on September 29 to 40.75p on October 3. Shares were trading at 155p in May.

    It has also suspended its interim dividend.
    888 Holdings saw share prices fall more than 40p from 146.5p on September 29, to 105.25p on October 3, from a high of 244p in May.

    London-based World Gaming fell around 42p from 63.5p on September 29 to 15.25p on October 3, from a high of 176p in April.

    The Isle of Man’s focus on attracting online gaming companies has been shaken by the news and concerns over jobs could follow.

    Despite the news, share prices may bounce back quickly, as bullish investors take advantage of the collapse to buy into the market at rock bottom prices.

    Resident Business News investment expert Peter Sharkey, said many will see the crisis as a money-making opportunity.

    He said: ‘I know some people who have invested, especially as Party Gaming shares are below 40p. Although their profits will be hit, at that level, they’re scheduled to pay a 12 per cent dividend.Furthermore, 888 has already moved up nearly 5 per cent and Party has a habit of following.’
    10 October 2006

    Related News

    • 03 August 2020

      The Book Beyond Slot by GAMOMAT Released on ORYX Gaming Platform

      It seems like the slots with an ancient Egyptian theme will never go out of style, and there is another one on the market - The Book Beyond by Gammomat. The developer has made this exhilarating game in collaboration with ORYX Gaming. This arrangement comes right after the suppliers rebranding and opens a new chapter in its slot development. Alongside all upcoming products, the hotly anticipated title goes live via ORYX’s RGS platform.

      Read full article
    • 10 July 2020

      Genesis Gaming is Joining the Relax Gaming's Esteemed Power by Partnership Network

      Relax Gaming (RG) has announced its next step in expanding its partnership network - Genesis Gaming is coming aboard and becoming the part of its Powered By program. By the statements of the officials, this is a great opportunity for both companies. According to this deal... ...the innovative slots provider will grant full entry to Genesis’ hit games available through Radi8, a mobile-optimized ecosystem that brings a never-before-seen iGaming experience to players.

      Read full article
    • 23 June 2020

      Groove Gaming Gains Access to Habanero’s High-Quality Gaming Content

      Slots and table games provider, Habanero, has signed a partnership deal with the fast-growing content aggregator Groove Gaming (GG). Leading supplier partners with a rapidly expanding aggregation platform with the brand’s high-quality titles.  Groove’s plug-and-play aggregation platform features an exciting range of slots, virtuals, and live casino options, boasting over 4000 releases from some of the industry’s best-known suppliers.

      Read full article