Banks May be Concerned About Giving PartyGaming Money

PartyGaming, in an effort to clear its name with US authorities, may be penalized for taking online bets. iGamingBusiness reports that the threat of retrospective prosecution has seen banks nervous about lending PartyGaming money.  As such, the one time largest online poker firm has had a tough time making acquisitions.

But as iGamingBusiness points out, a deal with the Department Of Justice would remove any problems, give PartyGaming the financial firepower to buy up rivals or return cash to shareholders or make it a possible takeover target for larger gambling firms.

The US government has shown little leeway in dealing with online gambling establishments, however, and a hefty fine could be issued based on recent trends, including a deal made with the European Union where they failed to budge in regard to online gambling.  Instead, the EU opted for other concessions. 

PartyGaming indicated last week that financial performance in the fourth quarter has been in line with management's expectations and it remains confident about the prospects for the current year.

It was only three years ago that PartyGaming was the single biggest IPO on the London Stock Exchange.  It held more than a 50 percent share in the explosive online poker market before having to pull out of the US sector following passage of the Unlawful Internet Gambling Enforcement Act just over year ago.  Party led the way of all publicly traded Internet gambling firms to pull out while the majority of privately held companies continued to take US bets and allow poker play from US customers.  PartyGaming's closest rival, PokerStars, suddenly became the number one online poker room, double the number of players of Party.  In leaving the US market, PartyGaming turned away more than 80 percent of its overall customer base. 

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Christopher Costigan, Gambling911.com CCostigan@Costiganmedia.com

Originally published December 17, 2007 11:11 am EST