[scottyy11]

never thought I would see the day,
but if the president signs the law passed by senate looks like poker will be dead in the US of A




By Pete Harrison
Mon Oct 2, 8:12 AM ET



LONDON (Reuters) - Online gambling firms faced their biggest-ever crisis on Monday after U.S. Congress passed legislation to end Internet gaming there, threatening jobs and wiping 3.5 billion pounds ($6.5 billion) off company values.

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Britain's PartyGaming Plc, operator of leading Internet poker site PartyPoker.com, and rivals Sportingbet and 888 Plc said they would likely pull out of the United States, their biggest source of revenue.

"This development is a significant setback for our company, our shareholders, our players and our industry," PartyGaming Chief Executive Mitch Garber said.

The House of Representatives and Senate unexpectedly approved a bill early on Saturday that would make it illegal for banks and credit-card companies to make payments to online gambling sites.

The measure was sent to President George W. Bush to sign into law, which most analysts see as a certainty.

"We believe that this will have a very material impact on the long-term prospects of online gambling, and in particular poker," said analyst Julian Easthope at UBS. "This will lead to a rapid decline in the use of online poker sites."

PartyGaming generates about 78 percent of its revenue from the United States, while Sportingbet gets about 62 percent there.

CRACKDOWN

Shares in PartyGaming, which rakes in nearly $4 million a day from its 19 million customers, fell 57 percent by 1155 GMT.

Sportingbet, which owns sportsbook.com and ParadisePoker.com, lost 60 percent, 888 was down 33 percent and Austria's bwin.com fell 24 percent.

Bwin could be pushed to the brink, having paid heavily for Swedish online poker site Ongame earlier this year to gain access to the U.S. market, said Leopold Salcher, an analyst at Austria's RCB. "This could break their neck," he said.

Online gaming exploded in 2005 with a string of high-profile company flotations in London, which has become the industry's corporate center.

The bulk of revenue has always come from U.S. players, but the firms were located in offshore jurisdictions like Costa Rica and Antigua for fear of prosecution in the United States, where the legal status of online gaming and betting was uncertain.

Shares in Sportingbet and BETonSPORTS had already been hammered after recent arrests of senior executives on charges of illegal gambling in individual U.S. states, but investors remained hopeful online betting and gaming would not be completely banned at a federal level.

Meanwhile, big American corporations like Las Vegas-based Harrah's Entertainment Inc. were forced to sit on the sidelines as gaming money streamed out of the country.

PartyGaming said in a statement, "If the President signs the act into law, the company will suspend all real money gaming business with U.S. residents."

"Any such suspension would also result in the group's financial performance falling significantly short of consensus forecasts for 2006 and 2007," it added.

MERGER SCRAPPED

Stephen Whittaker, joint chief investment officer at Britain's New Star Asset Management, said the likely ban could be challenged.

"This represents protectionism, and the WTO have said you can't do that," said Whittaker, whose portfolio includes about 2 percent of online gaming stocks. "Overall, we'll probably remain with most of our holdings."

"We'll probably reduce one, maybe two," he added. "We want to let the dust settle a bit -- it will take a few days."

Sportingbet said a ban would hit trading and it would scrap a planned merger with World Gaming as a result.

888 Plc said the move would hit its results, as did gaming software provider Playtech, whose shares fell 42 percent.

But Paul Leyland at Arbuthnot Securities said Playtech was relatively well positioned. "The only company for which you could categorically say that redeployment is easy is Playtech," he said. "But for the others it's much more difficult."

A ban would also hit payment processors such as Neteller Plc and Optimal Group's FireOne subsidiary.

(Additional reporting by Laurence Fletcher in London and Alexandra Schwarz in Vienna)

[Tchocky]

Thanks for the post.

[jjgold]

Its all over boys and no way around it, no one will challenge the us gov't beause you will lose and get buried forver.

find new hobbies

[isetcap]

Find New Hobbies.

I love it! For once, I seriously 'Laughed Out Loud'.

You are a beautiful man, JJ.

[scottyy11]

how long does it generally take for the president to sign something after the senate passed it?

[bigboydan]

Its all over boys and no way around it, no one will challenge the us gov't beause you will lose and get buried forver.

find new hobbies

I'm sure they will come up with something coach. It's just going to a little time for the books to find the flaws in that law is all. Besides, people survived the paypal stuff so they will survive this too.

[scottyy11]

Dan i thought that also, but why would party annouce this so quick?

Maybe they are trying to get American Poker Players to rise up.

Seems like they would wait for the dust to settle a little

[bigboydan]

Scotty, PartyPoker did say on there website that they will has another announcement on this issue on October 20, 2006. So maybe it's not all eched in stone just yet.

[bigloser]

Its all over boys and no way around it, no one will challenge the us gov't beause you will lose and get buried forver.

find new hobbies

Parties reaction is designed to mobilise US Poker players. This law is totally unenforcable, online gambling will continue. The IRS will continue to miss out on their share of the revenue.

[JoshW]

Party is pretty much the most valuable online gaming property in the world. And with this bill they are throwing in the towel on likely 70% of their business. If they don't think they can get around it what chance do the books and Neteller have? I think this is really scary. The market is saying this is a big deal, the gaming companies are saying it is a big deal. I don't see how we as player can't take this as very serious.

[pags11]

it definitely is very serious lakerfan...

[Dark Horse]

I wouldn't expect anybody to roll over without a fight. Except the British. What else is new? Blair-in-Bush-pocket syndrom

One door closes, another opens. This is a huge opportunity for others to pick up the US clients no longer welcome at PP.

[bigloser]

Party Poker have not roled over. They have 17 million customers 70% are American, there will be , that is 12 million unhappy voters.
History shows that bans like this cannot succeed. It is difficult enough with physical goods (like alcohol during prohibition). It is impossible on the internet.

[pags11]

Bush probably plays with them too...

[scottyy11]

Party Poker have not roled over. They have 17 million customers 70% are American, there will be , that is 12 million unhappy voters.
History shows that bans like this cannot succeed. It is difficult enough with physical goods (like alcohol during prohibition). It is impossible on the internet.

When their chief executive tells you they are rolling over , how can you say there not rolling over? People may not want to hear it........................unless this is a allin bluff it looks real bad

[bigloser]

When their chief executive tells you they are rolling over , how can you say there not rolling over?

"I did not have sexual relations with Monica Lewinsky"

Politics of course. This board is evidence enough that people are getting really angry, some might even get round to phoning their Congressman.
This sort of thing DOES NOT change peoples political allegiances but it does make them less likely to vote. Party will find a way around this after the election. Its statement says that accounts will be suspended NOT closed.

[bigloser]

Republicans have annouced that Party Poker does not have 12million customers in the US. They have 371 bonus whores with 32345 accounts each. It will have no impact on the election as they are all deceitful crooks and must therefore be Repunclican voters.

[Reef]

People do not panic. There are still many sites that are accepting US players and do not plan on changing anytime soon:

PokerRoom
FullTilt
Absolute
WPEX (rake free!)
Bodog
Paradise
Truepoker
Poker.com

----
Pokerstars is still undecided.


The law only makes FUNDING illegal (and wording says "businesses" not individual players) NOT playing a crime.

------------------

Moral of the story? If you like your civil liberties Vote Democratic. If Sen. Frist wins presidency, our country is doomed as we know it.

[Bill Dozer]

Paradise is a Sportingbet Plc brand and their biggest earner.

I'm surprised Party didn't wait for the latest WTO update. But, these concessions of defeat may be part of their strategy to stop the bleeding on the trading floor. It sends the message that, we are prepared to cut our arm (or maybe in this case both arms and legs) off to save our head. It says it will be a tough climb but there is life after US. Then, while they are complying, they can look reasonable as they complain to the WTO. I don't think Party plans to sit outside and watch Bodog Poker and WPEX get fat.

[caracalla]

".....illegal for banks and credit-card companies to make payments to online gambling sites....."

Same for withdrawal????

[pags11]

poker sites seem to be getting screwed...

[jjgold]

I do not know how Party Gaming does not go bankrupt now

[scottyy11]

Party will not go bankrupt. Revenue will be down but they will still be in the black. Sites like ladbrokes have never accepted US players and they are still around. Party will just shift focus to Europe.

[caracalla]

Sometimes I'm very glad living in Italy. This time is one....

[nosuzieno]

how long does it generally take for the president to sign something after the senate passed it?

Read today it should be sometime in the next two weeks

[nosuzieno]

time to fold those pocket aces boys...

[darkghost]

I've decided to cash in on all my poker accounts and play strictly at the clubs around here. I'm gonna wait on the sidelines and see how all this plays out.

[pags11]

darkghost,

so it's pretty much like Rounders for you now?...