Gambling911.com has learned that PartyPoker and PokerStars will likely be following 888.com suit and be pulling out of the US market.

Sources close to both poker rooms have informed Gambling911 that statements should be issued some time Monday from the two firms.

PartyGaming, fearful of its share price tumbling, is expected to announce that it will focus exclusively on the European and Asian markets as well as Canada.

PokerStars reason for pulling is not known at this time since the company does not trade publicly.  News regarding PokerStars came from a number of high level internet gambling executives close to the company though no official confirmation has come from PokerStars management itself during the early morning hours Monday.

Sportingbet is expected to continue operating in the US market despite legislation that pushed through Congress late Friday night which would prohibit US banks from sending payments to online gambling sites.

The banks have almost an entire year to comply, however, the smaller banks have already stated they would not have the necessary resources in place to monitor such transactions.

Sources close to NETeller have suggested that they will be reviewing a contingency plan with the intention of remaining in the US market. 

Nevertheless, Gambling911.com sources feel relatively confident that NETeller will not pull out of the US market in the immediate future.  NETeller has become one of the most popular payment processing methods.  The company was started by a colorful happy-go-lucky hippie and transformed into a massive online payment processing empire, the biggest firm of its kind within the internet gambling sector since 2000.  FirePay, another online gambling third party payment processor, is likely to leave the US market within the next six months, our source tells us.

A meeting will be held in London this coming Thursday between various payment processors, some of whom have already vowed to join possible legal action.

The internet gambling-friendly jurisdictions of Gibraltar and Antigua are already in the process of reviewing legal means to prevent the restrictions on internet gambling from going into effect.  Antigua has already won a landmark case against the US with the World Trade Organization.

Bodog.com Founder Calvin Ayre issued a statement to Gambling911.com late Sunday night: "Bodog is a broad based digital entertainment company that has long ago ceased to be dependent on any one revenue channel.  Bodog will continue to monitor things as they unfold but is not expected to make any changes until our study is completed."

London newspapers already began reporting Sunday evening that 888.com, perhaps the most trafficked online casino operation, would be pulling out of the United States market, though it was unclear what percentage of their overall player base consisted of US citizens.  Estimates suggest that nearly 80% of PartyGaming's (PartyPoker) customers originate from the United States.  PartyPoker is the largest online poker site, several times larger than its next closest rival, PokerStars.  Paradise Poker, once the largest, is ranked number 3 and belongs to Sportingbet.

PartyPoker's exit from the US market would ironically make the playing field much more competitive. 

In the past, long established offshore gambling companies have found new and innovative ways to get around payment processing issues.

Once reliant almost exclusively on Western Union, offshore sportsbooks were dealt a blow when Western Union began restricting transfers to such establishments in 2000 as a result of political pressure, most evident in the state of Florida.  While complying to requests from authorities in the US, there was still plenty of wiggle room afforded to offshore betting companies looking to utilize instant cash transactions. 

PayPal, wrought with security issues and complaints from state consumer agencies, entered the online gambling industry in 2001 and quickly departed after legal action was taken against them by the state of New York.  NETeller capitalized as a result of this exclusion. 

Shares in online gambling companies that trade publicly on the London Stock Exchange were expected to drop substantially Monday.  Many companies were expected to release statements during the morning in order to prevent a "blood bath".

The fall out is expected to be substantial but more established "old school" brands, specifically in the sports betting sector, are likely to fare much better than their rivals in the online casino and poker markets.  Online casinos which rely almost exclusively on credit card and electronic funds transactions are likely to be devastated as casino players are least likely to find alternative methods of payment.

Another area of concern lies with the casino and poker affiliate community which will be hit hard by the exit of an 888.com, PartyPoker and PokerStars, or even one of these large poker sites.  Though it is widely anticipated that others will eventually move in to fill the void.  Revenue derived from US players would be cut off in the short term.

It is doubtful that poker sites wishing to take on US players will be shut off completely from doing so via money transfers.  Despite efforts to already restrict credit card processing since 2000, much of which has been successful, dozens of banks continue to allow such transactions. 

While there are ways around this law (just ask the porn and rifle industries), publicly traded internet gambling firms view US lawmakers actions as prohibition and "unattractive" to the investing community, which in essence would make shares in these companies virtually worthless. 

The internet gambling prohibition, a "watered down" version of previous language that falls short of clarifying a 1961 "wire act" and applying that law to gambling on the web, passed through Congress as an attachment to a popular port security bill.  While many in the House expressed anger with the online gambling measure appearing on this unrelated bill, the House felt the port bill had to pass.

President Bush is expected to sign the bill into law as early as this Wednesday.

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Christopher Costigan, www.gambling911.com

Originally published October 2, 2006 1:41 am ET