Industry Insiders Reach No Consensus on PartyGaming's American Future

9 January 2009
Since Anurag Dikshit, the billionaire co-founder of PartyGaming, pled guilty to violating the United States Wire Wager Act last month, industry observers disagree on whether PartyGaming has a future in America.

In a mid-December note, Paul Leyland, an analyst with Collins Stewart, suggested that it is not in the Department of Justice's interest to inflict small fines on I-gaming companies and, following collection, allow those companies to operate again freely.

"The latest reports," Mr. Leyland wrote with regard to the heavy coverage ahead of Mr. Dikshit's appearance in a federal courtroom in New York, "if true, reinforce our view that Party is unlikely to get a US licence, or be purchased by a licensed operator, even if it does reach an 'agreement.' "

When asked his opinion on Mr. Leyland's projection on Party, Ivor Jones, an analyst with Evolution Securities, told IGamingNews Friday, "Who knows -- this is one of those situations where he could be right."

"Obviously, this is one of those situations where you can't look at the average," he continued. "So, we're not going to have a little bit of disaster, and a little bit of success -- we're either going to get acceptable deals, or we're not."

PartyGaming's stock-exchange release on Dec. 16 -- the day Mr. Dikshit appeared in court -- suggested the company had made "good progress" in its talks with the Justice Department, and was negotiating the final terms of a settlement.

In contrast to Mr. Leyland, the recent news flow around PartyGaming has left Simon J. Holliday, director of H2 Gambling Capital, feeling a bit more bullish.

"Paul is becoming the sector bear," he told IGamingNews Friday. "PartyGaming is understood to be working with the Justice Department toward a settlement, and we would expect them to be free to enter the market, should it be regulated, and so be a possible acquisition target."

Mr. Holliday said that after recent trips to the United States, he believes that, in order for the United States to conform with World Trade Organization rules, some foreign operators -- including those that have operated in America -- will be in line for licenses once a regime is established.

Another industry insider, who wished not to be named but is not affiliated with PartyGaming, was convinced that PartyPoker has a future in America -- as well as the potential to unseat one of the country's most powerful online poker brands.

"I disagree with Paul's note on the basis that too much water will have passed under any bridge by the time any licensing is available," the insider told IGamingNews Friday. "The PartyPoker brand will hold a position in the U.S. market way above any other established brand of today -- even PokerStars!"




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