Legal Uncertainty Threatens Party
Newspapers all over the world have published articles this week claiming that PartyGaming's planned $10 billion float on the London Stock Exchange later this month could be in serious trouble due to the uncertainty of online poker's legality in the U.S, from where the company receives an estimated 90 percent of its customers. Most reports indicate that analysts at blue-chip US institutions who would ordinarily be keen to purchase shares in PartyGaming are hesitant to back the float because they require more assurance that the American government will not harm the company. In fact, legal fears are believed to be the primary reasons why Investec Securities withdrew from its position as co-banking adviser to the float last month. PartyGaming will publish its prospectus by the end of next week and will then begin its attempt to persuade institutions to back it. Greg Feehely, a spokesperson for Altium Capital, told the Financial Times, "There is no doubt that there is a regulatory risk attached to this company and investors need to be aware of that. But that risk has also already been priced into PartyGaming's valuation. A company with that sort of growth record and potential would float at more than 20 times earnings. It is only being valued at around 10-12 times earnings because of the risks of the uncertain legal situation in the U.S."
Global Gaming Technologies To Resume Trading on AIM
Cash shell company Global Gaming Technologies Plc (GGT.L) has announced that following its reverse takeover of Event Data Correlation Ltd for £15.1 million in new shares, the company will again begin trading on the Alternative Investment Market of the London Stock Exchange on June 27th. Event Data Correlation has developed software that detects and analyzes price discrepancies in online betting markets for use in trading decisions.
Reports Released
I-gaming software provider World Gaming Plc (WGP.L) has posted its financial results for the quarter ended March 31st, 2005. Among the company's highlights is a 54 percent increase in royalty revenue growth from continuing licensees when compared to the same period last year. Wagering volume on the company's servers has risen to $2.0 billion, up from $1.4 billion over the same period last year. The company was admitted to the Alternative Investment Market of the London Stock Exchange just last month.
World Gaming Plc - Quarterly Report
Sportingbet Plc (SBT.L)'s financial report for the three-month period ended April 30th, 2005 shows a 31 percent increase in turnover to £390.5 million and a 137.5 percent improvement in gross margin to £57.0 million when compared to the same period last year. Operating profit climbed 242.4 percent to £20.2 million, of which the Paradise Poker unit was responsible for £9.1 million. Operating profit at all units excluding Paradise Poker rose by 88.1 percent to £11.1 million. Basic earning per share rose 83.3 percent to 5.5p while fully diluted earnings per share rose 100 percent to 4.2p.
Sportingbet Plc - Quarterly Report