Monday, October 16, 2006
by Chris Krafcik
President George W. Bush on Friday signed the U.S. Safe Port Act and, by extension, the accompanying Unlawful Internet Gambling Enforcement Act of 2006, and I-gaming companies today continued to bleed green. Some companies, with an untimely twist of the tourniquet, sold off their U.S.-facing operations and will focus on fortifying their developing or existent interests in gaming-friendly confines. Others, though, are adopting a wait-and-see policy with regard to the U.S. legislation, and will continue cautiously with business as usual.
An Abrupt About-Face
Just hours before the I-gaming ban was enacted, Sportingbet announced the sale of its U.S.-facing operations for a nominal $1 to Antigua-based Jazette Enterprises. The sale will reportedly wipe $13.2 million of debt off Sportingbet's books and spare the company an estimated $14 million in closing-related expenses. Sportingbet, which did 60 percent of its business in the United States prior to the sell-off, said it will maintain its European sports betting, casino and poker businesses and its Australian sports betting business. It also retains control of Paradise Poker, which will no longer service play from U.S.-based customers. Sportingbet shares closed today at 46.25p, down 12.25 (20.94 percent).
Rival Leisure & Gaming (L&G) followed suit, with its CEO, Alistair Assheton, announcing Friday that he would lead a management buyout of the company's U.S. operations for $1, saving the company $6 million in shutdown costs. "Leisure & Gaming simply could not keep the U.S. business going, but it'll be just fine with its Italian business," Assheton said. "The company . . . wanted to protect about 300 jobs in the U.S. operation." Other reports, however, have indicated that the sale may have "constituted a technical breach" of stock market rules and is under investigation by the London Stock Exchange (LSE). "We will fully investigate any apparent rule breaches and I can confirm we are looking at this case," an LSE spokesman said. L&G shares closed today at 8.25p, up 0.25 (3.13 percent).
Also turning away from the United States, PartyGaming on Friday announced its plan to immediately suspend all "real-money gaming activities" for U.S.-based customers. Its play-for-free Web sites, however, will still be available to customers in the States. bwin likewise announced that it will no longer allow U.S.-based customers access to its "real money games." PartyGaming shares closed today at 30p, down 4.50 (13.04 percent), while bwin shares closed at 17.60 euros, down 0.45 (2.49 percent) on the Vienna Stock Exchange.
Toronto-based software provider Excapsa joined the U.S. exodus, announcing Thursday the sale of its Excapsa Services and Game Theory Holdings units to privately held, Malta-based Blast Off Ltd. Excapsa also plans to withdraw its shares from London's Alternative Investment Market (AIM). The company will receive an initial cash payment of $10 million, with the remaining $120 million to be disbursed in payments spanning the next five and a half years. A total of $47 million in cash will be doled out to shareholders, the company said. Excapsa shares closed today at 16.75p, up 0.50 (3.08 percent).
Payment processor FireOne has discontinued processing Internet gambling-related transactions originating in the United States, the company said in a statement last week. FireOne shares were on an even-keel all day, opening and closing at 54p.
Additional London-listed I-gaming businesses cutting off U.S. customers include operators 888 Holdings (falling 1 percent today to 99p ) and Empire Online (falling 1 percent to 48) as well as Canada-based software supplier CryptoLogic (falling 0.5 percent to 944). Israel-based Playtech's licensees, with the exception of Golden Palace, have cut off U.S. players as well. Playtech fell today 1 percent today to 282.
"Once more unto the breach, dear friends, once more . . ."
Of the small band of companies continuing to do business in the United States, PokerStars has become the most visible, announcing recently that it will continue serving U.S. customers. With regard to the scope of the new ban, the company stated, "These provisions do not alter the U.S. legal situation with respect to online poker. It is important to emphasize that the act does not in any way prohibit you from playing online poker. PokerStars believes that poker is a game of skill. Our business continues as before, open to players worldwide including the U.S. You may play on our site as you did prior to the Act."
Online money transfer provider Neteller, meanwhile, has announced that it will maintain its U.S.-based interests, at least for the time being. In a statement to the LSE, the company said that it "expects to have a clearer view of how financial services companies can comply and any possible resulting impact on its business as the regulations are drafted in the 270 days following the signing of the act." In the meantime, Neteller will continue to ". . . maintain [its] existing customer and merchant support across all markets in currently serves." Neteller shares closed today at 153p, down 15 (8.93 percent).
As announced earlier this month, I-gaming provider IQ-Ludorum (IQL), like Neteller, has committed to "monitoring developments closely," although the company acknowledged that the U.S. legislation was expected to have an ". . . adverse impact on the group's provision of gaming software and gaming specific services." IQL shares remained steady all day, opening and closing at 2.38p.
The privately held Dublin-based Trade Exchange Network, which operates TradeSports.com, Intrade.com and TradeBetX.com, will continue accepting wagers from U.S.-based customers. In a statement to customers, the company said, "We would like to confirm that the company's policy on taking deposits, processing withdrawals and business operations remain [sic] unaltered."
by Chris Krafcik
President George W. Bush on Friday signed the U.S. Safe Port Act and, by extension, the accompanying Unlawful Internet Gambling Enforcement Act of 2006, and I-gaming companies today continued to bleed green. Some companies, with an untimely twist of the tourniquet, sold off their U.S.-facing operations and will focus on fortifying their developing or existent interests in gaming-friendly confines. Others, though, are adopting a wait-and-see policy with regard to the U.S. legislation, and will continue cautiously with business as usual.
An Abrupt About-Face
Just hours before the I-gaming ban was enacted, Sportingbet announced the sale of its U.S.-facing operations for a nominal $1 to Antigua-based Jazette Enterprises. The sale will reportedly wipe $13.2 million of debt off Sportingbet's books and spare the company an estimated $14 million in closing-related expenses. Sportingbet, which did 60 percent of its business in the United States prior to the sell-off, said it will maintain its European sports betting, casino and poker businesses and its Australian sports betting business. It also retains control of Paradise Poker, which will no longer service play from U.S.-based customers. Sportingbet shares closed today at 46.25p, down 12.25 (20.94 percent).
Rival Leisure & Gaming (L&G) followed suit, with its CEO, Alistair Assheton, announcing Friday that he would lead a management buyout of the company's U.S. operations for $1, saving the company $6 million in shutdown costs. "Leisure & Gaming simply could not keep the U.S. business going, but it'll be just fine with its Italian business," Assheton said. "The company . . . wanted to protect about 300 jobs in the U.S. operation." Other reports, however, have indicated that the sale may have "constituted a technical breach" of stock market rules and is under investigation by the London Stock Exchange (LSE). "We will fully investigate any apparent rule breaches and I can confirm we are looking at this case," an LSE spokesman said. L&G shares closed today at 8.25p, up 0.25 (3.13 percent).
Also turning away from the United States, PartyGaming on Friday announced its plan to immediately suspend all "real-money gaming activities" for U.S.-based customers. Its play-for-free Web sites, however, will still be available to customers in the States. bwin likewise announced that it will no longer allow U.S.-based customers access to its "real money games." PartyGaming shares closed today at 30p, down 4.50 (13.04 percent), while bwin shares closed at 17.60 euros, down 0.45 (2.49 percent) on the Vienna Stock Exchange.
Toronto-based software provider Excapsa joined the U.S. exodus, announcing Thursday the sale of its Excapsa Services and Game Theory Holdings units to privately held, Malta-based Blast Off Ltd. Excapsa also plans to withdraw its shares from London's Alternative Investment Market (AIM). The company will receive an initial cash payment of $10 million, with the remaining $120 million to be disbursed in payments spanning the next five and a half years. A total of $47 million in cash will be doled out to shareholders, the company said. Excapsa shares closed today at 16.75p, up 0.50 (3.08 percent).
Payment processor FireOne has discontinued processing Internet gambling-related transactions originating in the United States, the company said in a statement last week. FireOne shares were on an even-keel all day, opening and closing at 54p.
Additional London-listed I-gaming businesses cutting off U.S. customers include operators 888 Holdings (falling 1 percent today to 99p ) and Empire Online (falling 1 percent to 48) as well as Canada-based software supplier CryptoLogic (falling 0.5 percent to 944). Israel-based Playtech's licensees, with the exception of Golden Palace, have cut off U.S. players as well. Playtech fell today 1 percent today to 282.
"Once more unto the breach, dear friends, once more . . ."
Of the small band of companies continuing to do business in the United States, PokerStars has become the most visible, announcing recently that it will continue serving U.S. customers. With regard to the scope of the new ban, the company stated, "These provisions do not alter the U.S. legal situation with respect to online poker. It is important to emphasize that the act does not in any way prohibit you from playing online poker. PokerStars believes that poker is a game of skill. Our business continues as before, open to players worldwide including the U.S. You may play on our site as you did prior to the Act."
Online money transfer provider Neteller, meanwhile, has announced that it will maintain its U.S.-based interests, at least for the time being. In a statement to the LSE, the company said that it "expects to have a clearer view of how financial services companies can comply and any possible resulting impact on its business as the regulations are drafted in the 270 days following the signing of the act." In the meantime, Neteller will continue to ". . . maintain [its] existing customer and merchant support across all markets in currently serves." Neteller shares closed today at 153p, down 15 (8.93 percent).
As announced earlier this month, I-gaming provider IQ-Ludorum (IQL), like Neteller, has committed to "monitoring developments closely," although the company acknowledged that the U.S. legislation was expected to have an ". . . adverse impact on the group's provision of gaming software and gaming specific services." IQL shares remained steady all day, opening and closing at 2.38p.
The privately held Dublin-based Trade Exchange Network, which operates TradeSports.com, Intrade.com and TradeBetX.com, will continue accepting wagers from U.S.-based customers. In a statement to customers, the company said, "We would like to confirm that the company's policy on taking deposits, processing withdrawals and business operations remain [sic] unaltered."
