PartyGaming Becomes A Little Less Dependent On US Market
With online gaming under attack by the judicial authorities in the
United States, e-gaming major PartyGaming has announced a substantial increase
in new revenues from non-US sources. On Friday, the company revealed that group revenue climbed by 49% to $319.3
million in the second quarter, while the number of active poker players using
its online gaming rooms grew 23% to 14 million. Significantly, the company stated that almost half (46%) of the 232,446 real
money poker sign-ups were from outside of the US. This compares to 23% in the
same period in 2005. “I am delighted to announce that PartyGaming’s performance in the
three months to 30 June 2006 exceeded expectations," commented Mitch Garber,
Chief Executive Officer. He went on to state that he was "particularly pleased" with the firm's
international expansion in non-US territories, which accounted for 24% of overall
revenue in the quarter. The company has seen an especially strong take-up in
Europe. “Continuing to drive international expansion remains a clear objective
and over the coming months we aim to pursue the growth of our non-US business
aggressively, particularly in Europe and South America, where we continue to
see a number of attractive opportunities," Garber added. Share prices in the online gaming sector slumped last week after the US Department
of Justice announced that it had charged several senior managers of BetonSports,
the Costa Rica-based online gambling firm, with various fraud-related and tax
evasion charges. The move sent a strong signal that the US is preparing a major
crackdown on the industry, which, technically speaking, operates illegally by
offering its services across state lines and international borders, in contravention
of the 1961 Wire Act. "This indictment is but one step in a series of actions designed to punish
and seize the profits of individuals who disregard federal and state laws,"
US Attorney Catherine L. Hanaway of the Eastern District of Missouri, where
the indictment was unsealed, stated. The House of Representatives also recently approved legislation that would
force banks and credit card companies to block payments made to offshore-based
online gaming firms. PartyGaming is domiciled in Gibraltar, but, like BetonSports and some other
e-gaming firms, is listed on the London Stock Exchange. A comprehensive report in our Intelligence Report series examining offshore e-commerce and online gaming is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report6.asp
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