Online Casino News and Information

THE REGISTER
By Burke Hansen in San Francisco
Friday 29th December 2006 12:01 GMT

House of Cards - A recovery in the online gaming economy act is gaining traction, according to several reports. The passage of the Unlawful Internet Gambling Enforcement Act by the US left a swath of economic misery in its wake, but efforts by the major players in the industry to refocus their energies on Europe and Asia are starting to pay dividends.

Both Sportingbet.com and Partygaming.com reported stronger than expected earnings last week, as increasing numbers of players from the European and Asian markets offset the loss of the enormous American market.
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Partygaming.com reported an increase in daily poker revenue from $637,000 in October to $721,000 in November. Overall daily revenue in November, excluding the sportsbook, averaged $921,000.

Sportingbet.com reported an increase in traffic from 6,000 players per day to about 7,000 according to Gamingpublic.com, an industry trade paper. Banking giant UBS responded by upgrading its stock evaluation from reduce to neutral.

The wave of consolidation in the sector continues to pick up steam.

Harrah’s has agreed to a $27.8bn buyout, according to a company press release. The largest gambling conglomerate in the world is being taken private by a group of investors led by the Texas Pacific group, in one of the largest leveraged buyouts in history. Harrah’s began as a bingo parlor in Reno in 1937, and became the first Casino operator to be listed on the NYSE back in 1973. This comes on the heels of Murdoch’s BskyB’s takeover of 365 Media, which itself had just gobbled up longtime competitor Bowman’s.

It also follows the announcement a strategic partnership between the Sands and Cantor Gaming, and the confirmation by El Reg of ongoing merger talks between Ladbrokes and 888 Plc.

Scandinavian-oriented poker site Purplelounge.com recently rejected a $59m offer for half the company, according to Gambling911.com.

The collapse of the sector after the passage of the UIGEA has provided both the opportunity for consolidation- i.e., ridiculously low stock valuations relative to the cash generated by the sector- as well as the impetus to get big enough to weather any adverse legal developments in jurisdictions such as Germany, France or South Africa where internet gaming remains controversial.

It’s easy to imagine the online gaming sector going through same growing pains that beset the search portal industry in the late ‘90’s- too many competitors in a field likely to be dominated in the long term by a few major brands. Ironically, major American players like The Sands or MGM Mirage, with strong brands and cash to invest, are well positioned to pick up the pieces of a fragmented, weakened market.

Another response to the knee jerk reaction against online gaming by American authorities has been the development of poker currency exchanges to facilitate wildly popular online poker tournaments. Sites such as Pokerstars.com offer tournament credits which can be redeemed at a third party site for real money at discounted rates.

American authorities just can’t seem to squeeze that genie back in the bottle. ®

THIS ARTICLE CAN BE READ AT THE REGISTERTHE REGISTER

THE BIRMINGHAM POST
Dec 29 2006

Investors who gambled on the online gaming sector this year lost billions after the US effectively outlawed internet betting.

Law-makers in Washington called “no more bets” when they forced through the controversial Unlawful Internet Gambling Enforcement Act on the back of an unrelated Bill enhancing port security.

It came after two British gaming executives were arrested on American soil as the US raised the stakes against the industry.

Despite the early warning of a crackdown, the passing of the law sent shockwaves through the City of London and the gaming world in general.

Many investors had bet that the Senate would not have time to add its approval of the legislation to the earlier backing in the House of Representatives.

It was a gamble that did not pay off and shares in online casinos such as PartyGaming and 888 Holdings tumbled - losing investors billions of pounds.

The crash revived memories of when the dot.com bubble burst at the start of the millennium - and served as a valuable reminder that the stock market, just like the poker table, carried risks.

More than £4 billion was wiped off the value of the online gaming sector in one day - more than halving its value.

Marvin Sones, WorldSpreads.com, said: “Having seen the reaction since the US Bill back in early October it is clear to see that the gaming sector in most part has not had any sharp correction or as they say ‘dead cat bounce’.

“There has been no significant attempt to re-glorify this industry. Politicians in the US have all distanced themselves from online gambling and some would suggest this was all done for a mid-term election reaction.”
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THE TELEGRAPH (www.telegraph.co.uk)

By Richard Blackden
Last Updated: 6:38pm GMT 29/12/2006

Troubled Internet gambling group PartyGaming says the acquisition of assets from smaller rival Empire Online for about $66m will immediately lift profit next year.

In the first round of consolidation in the industry, PartyGaming is buying several assets from Empire, including NoblePoker.com, EnterCasino.com and Carnivalcasino.com. PartyGaming will pay for the sites by issuing just over 115m new shares, the company said today.

The deal should help PartyGaming reach more customers through Empire’s marketing operations, which uses software to direct punters to various poker and casino sites in exchange for a slice of the revenues generated. Mitch Garber, chief executive of PartyGaming, said the deal adds “strong management with excellent marketing skills that will help us accelerate our promotional plans”.

MORE - READ THE COMPLETE ARTICLE AT THE TELEGRAPH (www.telegraph.co.uk)

GUARDIAN UNLIMITED
Julia Kollewe
Friday December 29, 2006
Guardian Unlimited

PartyGaming today snapped up the gambling assets of its smaller rivals Empire Online and Intercontinental Online Gaming for $66.3m (£33.7m) in shares.

The acquisitions will add Empire’s Noble Poker and Club Dice casino websites to PartyGaming’s stable, as well as Intercontinental’s Fair Poker, Magic Box Casino and Miss Bingo sites.

The two deals are expected to be the first in a wave of consolidation in the wake of US anti-gambling legislation passed in October. The crackdown has forced PartyGaming and all other London-listed online gaming operators to pull out of the world’s most lucrative gaming market.

Aim-listed Empire said it will become an investment company after shedding its gambling assets. The deal provides the exit that the group’s founder and chief executive, Noam Lanir, has been seeking for months. He has a 32.6% stake in the firm.

MORE - READ THE COMPLETE ARTICLE AT GUARDIAN UNLIMITED

THE GUARDIAN

Jane Martinson and Simon Bowers
Thursday December 28, 2006

PartyGaming is to acquire the gaming assets belonging to its smaller rival Empire Online in a deal that could be announced as early as today. It is expected to be the first in a flurry of deals in the internet gambling sector in the wake of US anti-gambling legislation passed in October.

The acquisition, which is understood to value Empire’s gaming assets at between $30m and $40m (£15.3m-£20.4m), provides the exit that its founder and chief executive, Noam Lanir, has been seeking for months. Long before the ban came into force he had become sceptical about the young industry’s prospects given the hostile stance of US regulators and politicians.

For PartyGaming, the acquisition brings with it Empire’s marketing expertise. The Aim-listed Empire specialises in recruiting punters through its “skin” websites. It receives a cut of revenues from its various gaming service partners.

MORE - READ THE COMPLETE ARTICLE AT THE GUARDIAN

USA TODAY
Updated 12/19/2006 5:31 PM
By Ryan Nakashima, Associated Press

LAS VEGAS — Harrah’s Entertainment (HET), the world’s largest casino company, said Tuesday that its board has accepted a $17.1 billion buyout offer from two private equity groups.

The agreement with Apollo Management Group and Texas Pacific Group for $90 per share includes the assumption of $10.7 billion in debt, and is the largest deal ever to take a publicly held casino company private.

The price represented a premium of about 36% over Harrah’s closing price on Sept. 29, the last trading day before it announced Oct. 2 that Apollo and Texas Pacific had offered $81 per share to buy the company.

Harrah’s shares rose 12 cents or 0.2% to $82.30 Tuesday on the New York Stock Exchange before trading was halted over news of the deal.

A special committee of Harrah’s board, which excluded chief executive and chairman Gary Loveman, had been meeting in New York since last week after the company set a Tuesday deadline to receive offers.

The board recommended shareholder approval.

“In Apollo and TPG, we will have owners who share our vision for Harrah’s, are fully supportive of our current strategy and are committed to helping us execute on it,” Loveman said in a statement. “This will be a change in ownership, not a change in direction.”

Texas Pacific founding partner David Bonderman said he believed the private equity pairing would be able to “help Harrah’s deliver on its growth strategy” with a long-term perspective.

The group made no immediate mention of large scale redevelopment plans in Las Vegas and Atlantic City, which Harrah’s had previously said it would unveil by early next year.

MORE - READ THE COMPLETE ARTICLE AT USA TODAY

MSNBC
By Roger Blitz in London
Updated: 25 minutes ago

Any day now the Italian government is expected to show its hand on gambling.

In a move viewed by many in the sector as the latest evidence of a shift towards the liberalisation of gambling in Europe, Rome will award new gaming licences to a range of national and international companies vying for the chance to run betting shops, kiosks, casinos and online services.

The closely watched decision comes as governments, which have traditionally viewed gambling as an activity on the margins of acceptablity, are taking a closer interest in the sector because of the wider access to gaming brought about by advances in technology. With the Spanish regions poised to follow Italy in licensing online and onshore gaming, and a critical decision in Germany also expected imminently, operators are increasingly bullish about the prospects of attracting new customers in undeveloped markets.

Europe’s €50bn ($65bn) betting market has become even more critical to the sector since the end of September when the US shut its doors to online gaming and arrested UK executives connected with what was far and away the fastest-growing part of the industry.

The entire online gaming industry, which saw its value plunge by more than half virtually overnight after the US tightened its laws on online gaming, is now regrouping around Europe with new games offered in a variety of languages.

MORE - READ THE COMPLETE ARTICLE AT MSNBC

HENDERSONVILLE TIMES NEWS - Hendersonville, N.C.
By EDDIE PELLS - AP National Writer

For many NFL fans, there are millions of dollars up for grabs over the final weeks of the season. They watch every game, every player, in the hopes that those receivers, running backs and quarterbacks can turn small investments into big money.

Their hopes are pinned on the fates of their fantasy football teams. Sounds a lot like gambling, doesn’t it? But in the eyes of the NFL and the legal code of the United States, there’s nothing illegal about it.

Fantasy football received a free pass in a recently signed law that seeks to ban most online gambling, specifically targeting online poker. The law, signed by the president in October, was backed by the NFL and its well-paid lobbyist.

“It’s hard to assume anything,” said Anthony Cabot, an attorney who specializes in gaming law and internet gambling. “But it’s fairly clear from the correspondence related to the bill that an NFL lobbyist was, in fact, very active in the effort to get this bill passed. And there’s no question the NFL is a significant beneficiary of the exemption on fantasy sports.”

An estimated 12.8 million players, including a handful of NFL players themselves, play fantasy football.

MORE - READ THE COMPLETE ARTICLE AT HENDERSONVILLE TIMES NEWS

SHARECAST

LONDON (SHARECAST) - Payment processor FireOne Group has agreed to a 60p per share buy-out from its major shareholder, OGI.

Fireone shares have crashed from over 400p at the start of the year following the introduction of the legislation in the US that made it illegal to process online gambling payments.

The offer, from Optimal Acquisitions, a subsidiary of OGI, values the company at £32.4m. Over 75% of shareholders have already agreed the bid.

FireOne was established in April 2005, as part of a reorganisation of the OGI Group, to carry on the business of providing payment processing services to the online gaming industry. It floated on AIM in June 2005.

FORBES

PartyGaming says revenues have stabilised; seeing improvements in KPIs
12.14.06, 2:41 AM ET

LONDON (AFX) - PartyGaming PLC, which has been hit by new US laws restricting online gambling, said its revenues have stabilised quickly following the legislation and added it has begun to see improvements in a number of its key performance indicators.

The online poker operator also said the realignment of its infrastructure is almost complete and the company is on track to realise substantial annual cost savings.

Excluding sports betting, gross daily revenue in the last four weeks to Dec 11 averaged about 921,000 usd a day and overall player volumes averaged about 52,000 active players a day, the company said in a trading statement.

Gross daily poker revenues average 721,000 usd a day, having hit a low of 637,000 usd per day after the US law was passed.

Gross casino revenue, including bingo and backgammon, has been steady, averaging about 199,000 usd per day.

READ THIS ARTICLE AT FORBES