Home » PartyGaming Shares Dive Amidst Online Casino Industry Turmoil
PartyGaming shareholders today have been stunned by news that the value of their holdings has plummeted by almost 20%. PartyGaming is the parent company and operator of the world’s largest online poker room, PartyPoker, and a large online casino, PartyCasino.
After making solid gains in the last week following industry analysts’ predictions that the Goodlatte bill won’t make it through the US Senate in time to become law, the online gaming industry worldwide was rocked today by the news that that Chief Executive Officer of BetOnSports was detained in the US and now faces racketeering charges.
Internet gambling companies have long been aware of US laws prohibiting the accepting of wagers over the phone, however a lack of enforcement over an extended period of time appeared to give the industry license to operate without fear of penalty. This “laissez faire” attitude has been shattered today when news of the detainment and charges laid against David Carruthers became public.
Until now, many in the online gambling industry have thought that, to avoid prosecution, all online gambling executives needed to do was to not travel to the US. However, the industry is in turmoil following the controversial extradition of three UK bankers to face charges in the US last week. Industry analysts now have real concerns that the US government will further aggressively attack the industry and that more charges will be laid in the near future.
PartyGaming was not the only large firm to feel the force of the latest developments – a third of the value of SportingBet was wiped off the slate today following the news of the charges against Carruthers.
Online gambling companies rely heavily on US customers for revenue, with some analysts putting the figure at 70% of online gambling revenue originating from the US. One industry insider explained the frustration and confusion widespread in the industry by making the point that many of the larger companies have been openly calling for greater regulation in order to allow safe, responsible and profitable gambling. These companies have argued that people are going to gamble on the internet regardless of what restrictions are in place and that the US administration should look to legislate in a realistic, rather than politically-expedient, manner.
Almost unbelievably, industry analysts are saying that this week’s developments will probably do little to slow down the industry’s rapid growth, with some analysts claiming shares in online gambling firms were heavily underpriced even before today’s drama.
Perhaps there is at least a little bit of light at the end of what is sure to be a long tunnel for the online gambling industry.
Ed note: Ignore all the drama and escape your problems at PartyCasino!