Financial Week in Review | Nov. 23

24 November 2008

As third-quarter results season kicked into full swing, the 20 e-gaming stocks surveyed by IGamingNews were down 4.09 percent.

GigaMedia Ltd., which reported a 7 percent decline in sequential consolidated income, fell 24.2 percent on Nasdaq this week, but Ladbrokes, which released a relatively upbeat interim management statement two weeks ago, was the week's most significant gainer, up 6.29 percent.

Undoubtedly, it was CryptoLogic Ltd.'s deal with Gtech Corporation, however, that's made the biggest splash in recent weeks.

The Dublin developer's decision to drop its poker network and migrate its licensees to Gtech's International Poker Network will likely be the first in a series of liquidity- and technology-sharing deals.

The Gtech-CryptoLogic announcement, anyway, was the first on poker consolidation since July, when Absolute Poker and Ultimate Bet announced -- but never consummated -- a deal to merge their networks under the Cereus Poker brand. Ladbrokes, too, announced in early August that it would be joining the Microgaming network from January 2009.

In the third quarter of the calendar year, nearly every listed poker operator or provider -- with the exception of Unibet, Betsson A.B., Bwin Interactive Entertainment A.G. and AsianLogic Ltd. -- reported difficult trading conditions.

Perhaps PartyGaming, which absorbed a significant loss in poker both sequentially and year over year, will be the next to surprise the market with some variation on a liquidity-sharing deal.

Business-to-business news, meanwhile, has intensified. As European poker becomes less a growth driver for some, PartyGaming, 888 and Bwin have all hinted at b-to-b deals that, if inked, would likely be earnings enhancing and, to some degree, offset slowing sequential growth at the top line.

On the legislative end, the regulations for the Unlawful Internet Gambling Enforcement Act were finalized in a manner befitting the underlying law's enactment two years ago -- hastily and under circumstances politically suspect.

The regulations will take effect from Jan. 19, 2009, but Washington, D.C., insiders have informed IGN that the possibility exists for these regulations to be overturned under the seldom used Congressional Review Act of 1996.

Already, though, some United States lotteries that offer intrastate online subscription services have had credit card transactions blocked.

Finally, in France, the long-touted controlled opening is progressing though sources there told IGN this week that information on a tax scheme has yet to leak.

Chris Krafcik is the editor of IGamingNews. He lives in St. Louis, Mo.