"5.5 Billion Float May Be In Danger Due To US Gambling Laws"

The state of the unanswered questions regarding the present and future legal status of Internet gambling in the United States are planning up and creating a serious impact on Internet gambling companies that want to go public. An example of these companies is PartlyGaming, which only recently announced its plans to float on the London Stock Exchange. The projected valuation of 5.5 billion British pounds is substantial, but in fact the company may have to delay the flotation or even put it off entirely. PartlyGaming, is a Gibraltar based company. It locates in Gibraltar for tax purposes. The company owns one of the world’s largest online poker sites. The company has four founders who plan to share the anticipated one billion pounds derived from a successful flotation. There plan is for the owners of PartlyGaming, who founded the company five years ago, to sell 23 percent of the firm at the time of the flotation. All of this is in question however, in that now analysts at blue-chip institutions in the U.S., analysts of those companies that are expected to buy shares in PartlyGaming, are showing indications of cold feet. The fear is that the U.S. government policy, which presently is using the U.S. Wire Act to consider all online gambling illegal, may harm PartlyGaming’s flotation. These fears are great enough to cause the analysts to grow weary about automatically backing PartlyGaming. Instead, they are starting to seek out assurances that the company won’t be negatively affected. As one of these analysts has stated, they believe that the key point is whether US institutions back this flotation? They simply aren't sure about this. They see it as being very dicey in their opinion. An analyst of a major United States banking concern has remarked that they will be taking a deep breath before deciding whether or not they want to back this. The concern must first determine just how much further the Internet gambling growth story has to go and whether the background of its management is a credibility issue. But most importantly, he adds, the legal status of its core business in its core market is a major question.

Even though the activity is in essence illegal there, PartlyGaming derives ninety percent of its revenue from online poker players in the United States. Opportune of this is the fact that you may find no Internet gambling companies based in the US. The firms are based either in the Caribbean or in Gibraltar. While it is true that not all states prohibit online gambling, in fact numerous states do have anti betting laws, and these laws in principal could be applied to online poker as well.

This growing concern regarding legality among the United States blue-chip institutions, regarding the whole legal question, constituted the primary reason that last month Investecers Securities decided to relinquish its role as co-banking consultant to PartlyGaming. By the end of next week, when PartlyGaming’s prospectus is published, the company will undoubtedly attempt to win back the support of the United States blue-chip institutions.

Other Internet gambling companies, such as Cassavaca, owner of poker site 666.com, will be monitoring events very carefully, since they have also announced their intentions of going public later this year.