Bets still on gaming despite US online crash
THE online gaming industry was once seen as a safe bet
for investors, with analysts predicting the market could
quadruple over the next five years. Not any more. America's
new anti-online gambling legislation and the arrest of online
betting executives in the US and France has sent shares
in firms such as PartyGaming and World Gaming plummeting.
The most vulnerable firm is PartyGaming, which has crashed
out of the FTSE 100 and may collapse completely. The US
ban on online gaming hit the company hard; 80 percent of
its poker players live in the US.
When it floated a year ago the firm's stock hit 126p (E1.87,
$2.35). Shares have since slumped to 39p; growing doubts
about the firm's future have been fuelled by a series of
high-profile resignations including chief executive Richard
Segal.
But all is not lost. Another UK-based online gaming company,
ukbetting.com, which has no US business,received a preliminary
offer and saw its share price jump.
Online gaming still offers low overheads, efficient infrastructure
and proven advertising power. But US gaming firms focusing
on casinos and betting shops, rather than cyberspace, offer
huge real estate opportunities. Harrah's, which recently
agreed to a 279.3m takeover of London Clubs International,
is the subject of a $15bn buy-out offer.
In Britain, the focus is on the first supercasino -- will
it be at the Millennium Dome in London, or the regions?
Although the Anschutz/Kerzner Dome project looks set to
win, it is likely that, despite Government denials, other
supercasinos will finally spring up across Britain, with
Britain hosting an international summit on gaming regulations
this month. |
