What's Involved In the Party Gaming's US Talks?

The disclosure last week's by the London Stock Exchange listed online gambling group Party Gaming that it was involved in discussions with US authorities over its legal position in that country is causing major speculation in UK business circles.

On the passage of the Unlawful Internet Gambling Enforcement Act last October, Party Gaming pulled out of the US market, losing a large portion of its revenues.  During the past month Party has reportedly been exploring its legal position regarding US operations prior to the introduction of the UIGEA, which prohibits financial transactions for online gambling.

There is strong speculation about this week's buy note from Deutsche Bank, which points out that Party Gaming constituted an “easily palatable bolt-on” given current share pricing and assuming a green light were to be negotiated with the US Department of Justice. Several industry observers have noted that the major US gambling groups Las Vegas Sands or MGM, or even non-gambling Internet mammoths like Google or Yahoo! could find the possibilities attractive.

Some business analysts are predicting that if Party Gaming manages to absolve itself of illegality prior to the UIGEA, it would substantially enhance its Mergers and Acquisitions desirability as a target for major American gambling companies looking to enter the online gambling industry.

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