Party Gaming Investors Happy once again

Published on: April 23, 2011 

Whereas Party Gaming used to rule the US online gambling market with its online poker arm, Party Poker having held 40% of that market, things were not the same after the US introduced the Unlawful Internet Gambling Enforcement Act in 2006. This Act resulted in the London based group seeing its share prices plummet to rock bottom.

The group's focus thereafter shifted to the European markets which resulted in share prices starting to rise once again and investors have seen these shares dip and rise and then dip and rise once again as events affected the statistics. These events include the agreement reached between Party Gaming with the US Department of Justice followed by its recent merger with Bwin in order to create the biggest publicly listed online gambling entity in the form of Bwin.partygaming Digital Entertainments.

Since the US Department of Justice moved to shut down a few of the top US facing poker sites, including Full Tilt Poker, Absolute Poker and Poker Stars on Friday, 15th April, 2011, Party Gaming has been smiling as shares shot up by almost 40% on the Monday morning following the "Black Friday".

Analysts have revealed that there will be good times in store for Party Gaming investors as the player liquidity advantage enjoyed by the US-facing poker sites has now almost disappeared. This will enable Party Poker to once again pool US players with non US players and expand further into the European market with its new financial power.

The fact that the French and Italian governments intend rethinking the licenses that they previously granted to Poker Star and Full Tilt may also work in favor of Party Poker. Poker Star and Full Tilt may find it almost impossible to earn licenses in the European markets that are still in the process of regulation.

It is safe for analysts to say that the recent developments in the United States add between 15% and 20% to the group's Earnings before Interest, Taxes, depreciation and Amortization (EBITDA) forecasts. It should be noted, however, that the negative effects of the changes in the gambling tax regulations in Germany need to be factored in to these numbers.

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