Despite the outstanding current performance numbers from Party Gaming
( third-quarter revenue grew by six percent to $337.2 million) this
week, analysts have noted that these gains were made pre-the Unlawful
Internet Gambling Enforcement Act which has devastated the online
gambling operator landscape by announcing restrictions on US cash
flows to Internet gaming sites.
PartyGaming's investment bank expects the company's revenues to drop
by more than $1 billion next year as a result of the industry giant's
decision to pull out of the U.S. market in obedience to the new law.
Dresdner Kleinwort downgraded 2007 revenue projections from $1.513
billion to $450 million in financial reports released Friday. The
bank also reduced 2006 revenue forecasts from $1.344 billion to $1.134
billion.
The company will also suffer a one-time restructuring charge of $250
million in 2006 as a result of leaving the U.S. market.
"The impact of the recently passed legislation in the U.S.
has changed the shape of our business fundamentally,"
said PartyGaming's CEO Mitch Garber.
The company logged 1 024 204 active players during the third quarter.
But 824 556 of those players were based in the U.S. and are now cut
off from the company.
Its non-U.S. business has been surging lately, with overall group
revenue growing by 21 percent to $92 million in the quarter.But since
shutting Americans out from its real money sites one week ago, average
daily gross revenue for the non-U.S. facing business has been 2 percent
below the third quarter average.
PartyGaming has removed tickers from its PartyPoker network that show
the number of active players and tables. A PartyGaming spokesperson
told the Guardian this was done so that rivals like PokerStars could
not use the reduced numbers against it.
"In the very near term, PokerStars can be an issue,"
Garber told a conference call. "But the playing field is
going to become much more level. Most of the banks and processors
are set to leave the industry."
The company stresses that it remains well-positioned to succeed in
global endeavors. "We continue to grow what is already
a substantial business outside of the United States,"
said Garber to the conference call. "PartyGaming is very
much open for business for customers around the world. We do have
the world's largest non-U.S. poker site by a large margin."