Online Casino Industry Healing Slowly from UIGEA

10 September 2007

The UIGEA has caused the entire online gambling business serious repercussions, and several companies have incurred asto8unding financial loss as a result of this. However, as time passes, more and more companies are beginning to find alternatives to the American market, in places such as Europe, Asia and Latin America.

One of the companies that were struck was Playtech, the world�s leading online casino software producer. Playtech has released figures that show it is on its way to full recovery from the hit it took on the implementation of the US� controversial Unlawful Internet Gambling Enforcement Act (UIGEA). Only $ 2.2 million short of figures achieved before UIGEA, the company�s first half-of-the-year figures show an 80% jump in all non-US revenues. Playtech�s revenue in the first half of this year climbed to $44 million from $24.5 million. In the previous year, which included US income, Playtech took in $46.2 million.

Although not directly involved with payments and other things that the UIGEA made illegal, Playtech�s stocks were hurt by the fact that a number of online casinos had to shut their doors. For the online casino industry as a whole, Playtech�s results will be encouraging in that they represent a positive post-UIGEA life for the online gambling industry.

Less fortunate however, is 888.com. The subject of talks between the US Department of Justice and major online gambling firms like 888.com and Party Gaming on pre-Unlawful Internet Gambling Enforcement Act activities resurfaced over the weekend in a speculative article by the �The Independent� newspaper in the UK.

Released just before 888 released its quarterly results, the company will face a barrage of questions on speculation that the US authorities are planning to claw back up to $120 million (GBP60 million) from the firm.

The Independent article claims that the US Department of Justice is gunning for operators under the UIGEA. Despite its withdrawal from the US market, 888.com and its rival Party Gaming may be forced to cough up profits made before the online gaming ban became law, it speculates. Analysts are expecting 888.com to report a pre-tax profit of $16.4 million on revenues of $94.6 million. It is estimated that full-year revenues for 2007 will be roughly $198 million, up from $157 million in 2006.

At the time of America's ban, over half of 888.com's revenues came from the US, but the company only reduced its headcount by 25 percent. Analysts believe that 888.com's growth is now underpinned by a strong appetite for internet gambling in the UK, particularly among women.

OCN Staff

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Online Casino Industry Healing Slowly from UIGEA

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