Poker.com to Reorganized as a Private Company
At the end of October, the shareholders of Poker.com (PKER.OB) will meet to decide whether it will sell all of the assets of Poker.com Inc. to privately held Poker.com S.A.
If such a course of action is taken, shareholders will be given a stake in the private company that is equal to what they invested in the public company.
In a press release, Poker.com's board of directors said they would like to take the company private because of the recent letter from the U.S. Department of Justice stating that Internet gambling is illegal and because legislation that would ban Internet gambling has been passed in the U.S. House of Representatives.
"Based on the fact that the company is in the online gaming industry, there is very little credibility given to the value of its stock, hence it is almost impossible for Poker.com Inc. shares to be fairly valued or to significantly increase in value," the company said.
Park Place Adjusts Downward
Park Place Entertainment Corp. (PPE) is warning that its third-quarter results will not look as rosy as was previously expected. The company is blaming poor results from Las Vegas hotel and casino Caesars Palace, the ending of its contract with Enron Corp. and weather damage to some of its properties.
On Thursday the company said it expects earnings of 14 to 16 cents per share instead of the previously forecast 17 to 19 cents per share. The Enron contract termination and damage from Isidore, a tropical storm, could push the earnings down further to between 12 and 14 cents per share.
The results will be made public on Oct. 24.
One I-Gaming Operator is Part of the Vice Fund
Operators of the Vice Fund, a mutual fund that invests money in so-called "sin" stocks, say its stocks outperform the S&P 500. One of the companies it invests in is involved in Internet gambling.
The fund invests in companies that make alcohol, cigarettes and weapons as well as gambling companies.
According to Dan Ahern, who founded the fund, MGM Mirage (MGG) is among the companies in its portfolio. A little over a week ago, MGM Mirage softly launched its Internet gambling site, playmgmmirage.com.
Gambling companies make up 19.1 percent of the fund's stocks, which include Anheuser-Busch, British American Tobacco, L-3 Communications, Lockheed Martin, Harrah's Entertainment, Ameristar Casinos Inc. and Esterline Technologies. Alcohol companies make up 24.9 percent of the fund, defense companies constitute 24.2 percent and tobacco companies make up 18.2 percent.
Investment Experts Approve of MGM Mirage's Online Venture
Investment analysts are applauding MGM Mirage's choice to get involved in the online gambling market, the Las Vegas Review Journal reported last week.
Harry Curtis of McDonald Investments said the Las Vegas-based casino and hotel operator is not risking much by spending $15 million to open the online casino out of the Isle of Man.
"It makes sense for MGM Mirage to stick its toe in the water," he said. "$15 million isn't that much. It's really just research and development spending. As long as they stay on the right side of regulators, and I think they will, there's no worry for shareholders."
Andrew Zarnett of Deutsche Banc Securities was also positive about the project.
"The upside is fantastic. This gives them a chance to capture business in Europe, and if and when the U.S. decides to allow Internet gambling they'd be years ahead of their competition," he said.
Aqua Online's Revenue is Down
Aqua Online (JSE: AQU) is reporting a loss of 11 million rand for the end of its fiscal year, which compares to last year's profit of 23.7 million rand. Revenue has dropped 16 percent throughout the year.
The South African company generated 16.8 million in cash last year, but spent 4.1 million rand this year.
Brent Shahim, the company's CEO, said the results were due to economic situation in both the gambling and e-commerce fields. Part of the problem is the credit card transaction problem that has plagued many I-gaming companies this year, he said.