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.