Wednesday, September 07, 2005

Gambling giant's shares slide to £2BN

Gambling shares came off the boil in dramatic fashion yesterday after poker giant PartyGaming’s unsettled investors with a warning about future growth.

The owner of saw its shares slump by a third, wiping more than £2 billion of its value, just two months after its spectacular stock market debut.

Fears of a crisis in confidence in the fledgling sector also prompted heavy losses in the shares of rivals Sportingbet and Empire Online.

PartyGaming said an increase in the number of casual punters using its sites meant it was making less profit per user and was finding it harder to hold on to customers.

Investors have piled into the firm since its flotation at the end of June, making it bigger than blue-chips such as retailer Marks & Spencer, with a market value of more than £6 billion.

However, this fell back to just above £4 billion yesterday, taking it below the level seen at the time of its debut. The stock will be promoted to the FTSE 100 Index in a reshuffle based on last night’s closing prices.

The Gibraltar based group said in its maiden interim results:

“Against a background of moderating market growth, group revenues are expected to continue to show good year-on-year growth, although at rates lower than the substantial rates previously experienced.”

This was despite it reporting a 70% hike in earnings to 257.7 million US dollars (£140 million) and an 81% rise in revenues for the six months to June 30.

Many experts have expressed concern about the potential for the boom in online gaming to be a fad, while the legality of online poker in the United States has been an issue.

Analysts said the stocks were settling down to more sustainable levels after running too far ahead in recent weeks.

Paul Leyland at stockbroker Seymour Pierce said:

“We believe that the market is sensible to correct some of the froth that has surrounded the sector.”

He believed the changed of the timing of the television broadcasting of the annual World Series of Poker was key, as the show made the poker market. It was broadcast in the second week of July last year but was only aired in late August this time.

Despite PartyGaming’s comments about the sector, casino operator was standing by plans for a market listing.

The world’s largest online casino unveiled plans to float just last week, with an expected market value of £700 million.

A spokesman said the plans were still “totally on track” and that the businesses were very different, due to PartyGaming’s concentration on poker and reliance on the US market.

Monday’s figures included an 89% rise in poker revenues. is the world’s largest online poker site and had 415,633 active customers in June. The group also has gaming brands including Starluck Casino and PartyBingo.

Analyst Hilary Cook, at stockbroker Barclays, said:

“The shares had enjoyed an extraordinary debut, much better than we expected, but they are very vulnerable to any disappointment.

The City never likes nasty surprises and this is a difficult business model to predict.”

Richard Hunter, at broker Hargreaves Lansdown, said the reaction was “rather extreme” and said he believed the fundamentals of the online gaming story had not changed dramatically.

Shares in Sportingbet were 13% lower, despite it saying in a statement that it was continuing to trade in line with management expectations, while Empire Online was off 14%.

Related Links and Articles:

My Gibraltar Directory - Casinos & Poker Rooms Online

London Stock Exchange

Gibraltar Government new Gambling Legislation Consultation Paper PDF Format (Not draft Bill)

02 September 2005 - Second Gibraltar online gaming group to go public

01 July 2005 - Investors turn online Poker firm into retail giant

21 June 2005 - Gibraltar and USA clash over gambling

20 June 2005 - Gibraltar Government to push new Gambling Laws by Autumn


Blogger lucky2win said...

Bill Gates dies and goes to heaven. Saint Peter greets him at the pearly gates and says, "Bill you're such a unique individual that we've decided to give you a choice between heaven and hell."
Bill thinks about this and asks if he can get a look at the two options.
St. Peter says, "Sure, I've got a couple of windows you can look through."
So he opens the window to heaven and Bill sees lots of angels sitting on clouds plucking harps.
Peter then opens the second window to hell. It's a brightly lit casino – lots of people drinking, laughing, and having a good time. There are naked dancing girls on stage and in the corner a nice little poker room. Doyle, Mike and other poker greats are playing Bill's favorite $3-$6 Hold'em. There's an empty seat with chips and they wave at Bill to come join them in the game. Bill tells Saint Peter that he's decided that hell looks like its more fun than heaven and he wants to join the poker game. Saint Peter snaps his fingers and Bill's wish is granted.
Well about 6 months go by and Saint Peter decides to see how his friend Bill is doing. He opens the window to hell and there is Bill shacked by his ankles, hanging over a fiery pit. Peter asks him how he likes his new home.
Bill says, "Saint Peter, this isn't anything like you showed me. What happened?"
Saint Peter responds, "Sorry Bill, I thought you realized that was just the demo version".

Joke bought to you by pokerjoke they send you a joke everyday

7:15 pm  

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