More PartyGaming Pitfalls as Online Poker Firm Exec Resigns

PartyGaming chief executive Mitch Garber announced he will be leaving the one time online poker behemoth following massive losses over the last year and a half.  Gambling911.com had been reporting the past few weeks that Party was in serious trouble of losing its marketshare overseas as both the iPoker Network and OnGame continue to overtake what had been Great Britain's single biggest IPO in 2004.   Garber intends to stay on with the company until May 2009.

Garber, a Canadian national, said he planned to return to North America with his family and will remain with the firm until a successor is found.

The struggling company's profit dropped an astonishing 67 percent over the past year under Garber's leadership. 

PartyGaming slid the most in 17 months in London trading after the company also said revenue growth was ``lower than expected'' over the past five weeks, though earnings were ``in line'' with its forecasts. The owner of PartyPoker.com is boosting investment outside the U.S., where a 2006 law barred foreign betting Web sites, cutting PartyGaming off from its main market.

Both PokerStars and Full Tilt Poker, which have capitalized on business in the US market after PartyGaming's departure, have overtaken Party for the number one and number two spots in terms of online poker "real cash players", respectively.

PartyGaming dropped 4 pence, or 15 percent, to 23.5 pence in the English capital, the day's lowest price. A close at that price would represent the steepest daily percentage drop since Oct. 2, 2006. Before today, the stock has dropped 5.2 percent this year, adding to an 8.7 percent decline in 2007.

Garber said he informed the board of his decision last night. The search for a new CEO will begin immediately, he said. Both internal and external candidates will be considered.

``I think it's always great for a company to promote from within,'' Garber said. A number of people who have come to PartyGaming through acquisitions or progressed through the company would have the ``relevant skills,'' he added.

Sources close to Gambling911.com reveal that "the lawyers now run PartyGaming and they are essentially running it into the ground and Mitch has had zero control over the firm".

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Christopher Costigan, Gambling911.com Publisher CCostigan@CostiganMedia.com

Originally published March 5, 2008 7:38 am EST
 

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