This one hit the markets running today. Despite negative publicity it was well supported so I jumped in for a small holding--anyone else joining in?? I am hoping for a good run up before the shorters get going.

Huge losses for net gamblers
By James Quinn, Business Correspondent (Filed: 03/10/2006)

More than 3.5bn was wiped from the value of Britain's leading internet gaming companies, with PartyGaming, the world's biggest online poker company, seeing its market value slashed by 2.5bn.

The price collapse saw its shares plummet 62 to 45p a 58pc fall which means the shares are highly likely to be removed from the FTSE 100 blue-chip index at the next FTSE reshuffle in December.

PartyGaming, the world's biggest poker site, had a market value of 4.28bn at the close of trading on Friday. When it opens this morning, that value will have fallen to just 1.8bn, some 1bn less than a new company would need to be capitalised at to enter the FTSE 100.

Its removal from the FTSE 100 would end a remarkable 16 months for the company, which at its peak was worth 7bn more than twice the market capitalisation of British Airways.

But PartyGaming was just one of many sufferers in the market yesterday, with fellow sizeable online gamers such as Sportingbet and 888 Holdings bearing the brunt of the effects of the new bill, which follows a number of high-profile arrests in the sector.

Sportingbet, whose chairman Peter Dicks was released from US custody on Friday after the Governor of New York chose not to sign an extradition order requested by the state of Louisiana, saw its shares fall from 184.25p to 73p, a 60.3pc fall.

Shares in 888 Holdings, whose flotation chief executive John Anderson stepped down recently, fell 26.1pc, off 38.25 to 108.25p.

Gigi Levy, who replaced Mr Anderson as 888's chief executive, told The Daily Telegraph: "It is the end of online gambling in the US as we know it. This is the first time a federal bill has been passed that specifically deals with online gambling.

"In the past all the others were old acts that had to be tweaked, like the wire act. The big thing here is that we now have a clear congressional view to say it is illegal."

The new federal law relating to internet gambing was passed late on Friday as part of the Safe Port Act in the US, designed to combat terrorist activities at American ports, which at the last minute had certain provisions known as the 'Unlawful Gambling Internet Act of 2006' inserted into it. The Act is expected to be signed by President Bush who has used his veto just once in his near-six years as President - within 14 days.

The effect of the new law, which will be implemented within 270 days, will make it illegal for banks and credit card companies to process online gaming payments from the US. Both PartyGaming and 888 announced they were suspending real-money US transactions, while Sportingbet said it intended to comply with the new law.

Lawyers for all the big companies involved in the sector are understood to have considered the viability of a legal challenge, but the legislation is thought to be so watertight that such a challenge would be futile.

Online gambling groups are now expected to refocus on European and Asian markets.

way things are shaping up this is going to fly straight past the 250 and join Sportingbet in AIM !!!!!

I have thought about how the US could bar their citizens from visiting these gambling sites, and thought it may not be possible US implement a super proxy server that would filter all visits to these gambling sites from America. Never thought they would bar the transactions.

Anyway, looking at how things are developing. One could pray President Bush is going to use his veto (Not likely) or one could buy into the upside that Party Gaming still have 270 days to get its lawyers together to challenge the Act.

I can see a lot of gambling companies would be issuing profit warning in weeks/months to come. Abandon ship while you still can afford to absorb the loses. After two of such warnings that comes along, you will be down with the sinking ship.

PRTY divi has now been cancelled.

To me, a cancelled divi means the share is not worth 40p, probably not even 20p.
Only IMHO, NAG, DYOR etc.

Interesting to see if 888 cancel both of their divi's on the 11th Oct.

I have my own way of valuing the stock, based on my calculation, not to disappoint those who are already deep in red, I think there will be many more profit warning to come and there is still a very long downward trend to follow from this position. But again, I won't go short my position to prove me right. I will avoid this share, there are plenty of other shares which has better prospects and does not have its entire market exposure built around one geographical area alone.

Err PRTY? it's ENTIRE market exposure is not in the US sikhlaw, a high % may have been but not the entire market. Sorry but felt that needed correction.

if the consequences had not been so dire for some "friends" on here, could have been more jokey with posts/puns like "The party's over for PRTY", which I am afraid is the truth nevertheless.

PRTY may have been the largest online gaming company till Sat. But takes away the US, will it dominate in any other markets, may even had to be content with much less??? Low entry cost, good cash flow and high profit margins (eg. easy money) in online gaming will attract many able and determined competitors.

UKB is already well established and totally non-US involved

stockbunny, I think you are right. It is only 90% of the revenue generated from US. I do apologise for the mistake.

Interesting...notification of buy of PRTY shares by Barclays.

Bunny

i see they dipped below the 3% last week but have just gone back above, may only have been very small transactions that took them either side or a cracking sell and rebuy (if they had sold their whole holding) - id guess its the former

Some of these institutions would like to bail themselves out so they issue a positive statements.

Thanks Fundy, your thoughts are always sound :>)

Daily Telegraph - 05/10/2006

Credit card punters face online betting ban - By Simon Goodley


Millions of UK credit card users could be blocked from betting online in the wake of the US Congress passing laws curbing payments for internet gambling in America. Two of the UK's most popular credit cards - MBNA and Capital One - have refused to rule out barring customers from gaming sites.

The news emerged after weekend moves to outlaw payments to online gambling sites by US-based banks and credit card firms - a development that saw the value of online gambling companies listed in London drop by 3.5bn on Monday.

APACS, the payment industry's trade association, predicted that some American companies operating in the UK could now look to impose a ban.

"They may take the decision because of corporate structure, if a chief executive knows that he risks arrest next time he steps off a plane in the US," said Sandra Quinn, the director of corporate communications for APACS.

A spokesman for MBNA, which has seven million credit cards out of a total British market of 69.9m, declined to rule out a policy change. "We're watching the developments in the US regarding the new legislation. It is a bit too early to say anything at the moment, but we will keep an eye on it," he said.

Meanwhile, Capital One, which has headquarters in Falls Church, Virginia, and has more than four million UK customers, said it was unable to make a comment, although Morgan Stanley insisted it had no plans to introduce a ban.

Despite online betting being completely legal in the UK, American Express blocked its card holders from placing online bets 10 years ago. Citibank followed lead two years ago when it justified its actions by saying it was applying "best practice established by Citi Cards in the US".

At the time, it added: "We believe that our action will help limit potential risks of fraud, money laundering and the often undesirable financial impact that gambling on credit may have on individuals, and is therefore in the best interests of Citi Cards UK and its customers."

Anyone reckon it will go lower than 28p.?

Fair value according to my valuation is 16p or lower. So, if you ask me if it would go lower than 28p, the answer is yes, it will, probably after a few profit warnings.

rpaco - that's almost a spread betting question. Are you playing the points game?
imo, with PRTY falling out of the FTSE, 28p is a distinct possibilty.