Excitement is mounting for this month's expected PartyGaming Float, which could peg the online poker company at anywhere between $8 bil-$10 bil. PartyGaming shareholders are predicted to sell as much as 23 percent of company shares, which will make this the most substantial IPO on the London Stock Exchange since 2001. The anticipation, however, has been somewhat dulled by threats of U.S. regulatory action against online poker and gaming sites.

The U.S. Department of Justice (DOJ) has recently increased pressure on online gaming sites, citing that they violate the 1961 Wire Act, which forbids the transmission of bets over a "wire." The DOJ has interpreted "wire" to refer to internet transactions as well. PartyGaming feels secure in its legal status, as it believes that the Wire Act applies to sports betting only, and has no implications for online poker.

Although until now, the DOJ's bark has been bigger than its bite, PartyGaming's upcoming float has put the DOJ in a tight position, which could force it to adopt fiercer tactics. Though licensed in Gibraltar and set to float in the UK, PartyGaming constitutes a menace for U.S. regulators, as American online poker players comprise PartyGaming's main customer base. The company's float will lend it greater prosperity and legitimacy, both of which could prove disastrous for U.S. regulatory forces.

Even if the DOJ refrains from taking any major action against PartyGaming, the potential clash could prove a deterrent for investors. This being said, the ambiguous legal status of online gaming in the U.S. has reportedly been factored into PartyGaming's estimated worth.

Source:  Poker777 Staff

Sunday, 05 June 2005