Gibraltar-based online gaming firm PartyGaming was said on Saturday to be losing interest in merging with 888 Holdings; instead it is said to be considering a purchase of part of Austrian Internet betting company bwin.com.
PartyGaming spokesman John Shepherd would not comment, but said that the company had continued to reduce its cost base by cutting jobs. "Out of the 1,750 staff in India, we had to let go of 800," he said.
"It was necessary to reduce the cost base as a result of illogical, ill-conceived and inconsistent prohibition legislation in the United States," he added.
Internet audience rating firm ComScore Networks said at the weekend that September figures for the online gambling category showed a general traffic increase in Europe of 3%, with 888.com in the lead at 6.9 million visitors (up 9% over August) with Party Gaming coming second with 4.1 million visitors - up 16%. Of course, these figures do not reflect the effect of the US October Unlawful Internet Gambling Enforcement Act.
Prominent e-gaming firms, many of which lost much of their revenue when the US market folded almost overnight, are likely to consolidate to make sense of their extended cost bases and shrinking revenue streams. London-listed Party Gaming lost 75% of its revenue, and its shares have fallen by 75%, closing at 27.5 pence on Friday.
Support for the embattled gaming sector came last week from UK sports minister Richard Caborn who seemed to tell an Ascot conference that the UK was sympathetic towards Antiugua and Barbuda, which is fighting a WTO case against the US. A dispute resolution panel is expected to meet during November, and an outcome is due in the spring of 2007.
"It will be a landmark decision," said Caborn, "We sympathise in the sense we want the WTO to clear up this area."
"Antigua has made it very clear it welcomes the support of the EU in this. We will find out the WTO's position in 2007," he added.
However, Antigua's case applies only to horse-racing, and almost certainly won't help the pure gaming industry even if the US loses. The US claims it is already conforming with the disputed 2004 WTO rulings (which went in Antigua's favour) but that clarifying existing laws on interstate horseracing or federal criminal laws was a possible means of compliance with a further ruling.
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