ANTI-GAMBLING LAW COULD BE SCRAPPED SAYS PARTYGAMING BOSS
20 October 2006
Friday October 20, 2006
PartyGaming chief executive Mitch Garber has said he thinks there is a 50% chance of new prohibitionist US legislation which outlaws online gambling being scrapped within three years should the balance of power in Washington drift away from the Republicans.
“That might seem like wishful thinking but we could see a strong backlash from US players … and there could be changes [of control] in the house and senate,” he said.
“In the meantime, we are going to keep our US database of [former] players – don’t forget, 10 million people have our software downloaded on their computers.”
His position was echoed by Sportingbet chief executive Andy McIver, who also believes the US political climate could change in the industry’s favour.
However, industry insiders suggested offshore operators such as PartyGaming, Sportingbet and 888 would be unlikely to regain their dominance in the US should anti-online gambling laws be fully unravelled.
They would face heavy competition from the likes of Las Vegas operators Harrah’s and MGM – businesses which had previously avoided internet betting because of confusion over its legality.
PartyGaming, which operates poker and casino websites, immediately closed to US business when the Safe Port Act was signed into law last week. As a result the group lost 70% of poker revenues and 65% of online casino revenues overnight.
Mr Garber conceded PartyGaming had been overtaken as the world’s largest poker operator by rival PokerStars, but described the Israeli-owned group as a “black market operator”.
He played down concern that lower player numbers on PartyGaming’s poker site were likely to prompt an exodus of non-US players.
PartyGaming remains the largest operator in Europe, where the number of new players last week reached a record high. Overall non-US revenues, however, declined 2% for the for the week.
Following its exit from the US, PartyGaming said it expected to take a $250m (£133m) hit to its full-year accounts. Much of this relates to goodwill writedowns on acquisitions including Empire Poker and MultiPoker. It also includes a provision against bad debts from any of the 30 firms that facilitate player payments, should they go bust.
Shares in PartyGaming closed down 2.5p at 28.75p.
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