The four founders of online poker giant Party Gaming became the poster
children for instant mega-wealth when the company went public in London
not long ago. Their shares were valued in the billions as Party Gaming
entered the FTSE 100 index with a value in excess of GBP 4.5 billion.
But politicians thousands of miles away in Washington DC last weekend
reversed their fortunes dramatically when they maneuvered into place
a bill designed to disrupt the flow of cash from American online gamblers
to offshore gambling venues. The early morning vote, taken as Congressmen
itched to get away over the weekend to begin electioneering, had a
devastating effect on London listed companies when the markets opened
on Monday this week. Many companies, Party Gaming included, found
their values had more than halved as panicking investors bailed out.
The four founders of PartyGaming saw a stunning GBP1.8 billion wiped
off the value of their holdings in a matter of days, with biggest
shareholder Anurag Dikshit's 29 percent stake worth GBP 773 million
less than at the start of the week. His holding, which was worth GBP
1.24 billion at last Friday's closing share price of 107p, is now
worth GBP 467 million.
Dikshit recently stood down from the board of the Gibraltar-based
company to take on a role as head of research and special projects,
with responsibility for creating games. Two other founders, Ruth Parasol
and lawyer husband Russ DeLeon, who each have 14.9 percent of the
gaming group, have seen the value of their stakes fall by GBP 397
million since Monday to GBP 239.4 million.
Vikrant Bhargava, the fourth founder, has also seen his 7 percent
stake tumble in value by GBP 230 million to GBP 138.8 million.
As a public company, Party Gaming is between a rock and a hard place,
and will have to turn away it's substantial US player business once
the legislation is signed into law by President Bush.
PartyGaming had net cash of $92.8 million on hand when it reported
its interim figures at the end of June, and the company took action
to stem the outflow of cash from the group on Tuesday when it cancelled
its interim dividend, worth $115 million. Spokesmen said this was
to take advantage of any acquisition opportunities that might arise
as a result of the US decision, which is likely to see some smaller
operators going bust, while others could be forced to sell or merge.