Ultimate irony of new anti-gaming law

JacksNQueens · #1 10-12-2006, 11:18 AM

I blooged about this which you can read at www.blog.jacksnqueens.com for more detail but the basic idea is that the companies that have to withdraw because they are publicly traded are now going to become the biggest advocates for enforcement of the law. The reasoning is simple, they can't allow the competition to operate illegally in the U.S. and make a ton of money and then hammer them in Europe and Asia. I think we will see battle lines drawn very soon in the poker industry between the companies still in the U.S. market and those that are out.

Blake
Affiliate Manager
JacksNQueens.com

richardb · #2 10-12-2006, 11:33 AM

That is why PartyGaming's stock should be about 75% less than it currently is. Their poker room is going to be a ghost town due to the lack of player liquidity. PartyGaming will still make some money from their casino properties (starluck, planetluck, partycasino) and from their newly acquired sportsbook (gamebookers.com..soon to be called partybets.com), because these are not player dependant games. They are player vs house games.

The best case scenario for PartyGaming is for the feds to shut down the money supply to neteller and do the same to the poker sites such as pokerstars, ftp, etc. This way, PartyGaming can use their marketing skills to own a majority of the non-US market.

Otherwise, PartyGaming's stock will be down the tubes and they might as well delist from the stock market or buyout all the shares and go private and then become a rogue site operator.

I find it amazing that the private sites insist that they are not breaking any laws. Just shut the fuck up and deal the cards and quit lying to everyone. You are not fooling anyone.

Brandon · #3 10-12-2006, 02:30 PM

Richard hit it on the head, all these rooms saying they are here to stay are basically trying to grab as many players for the 270 days as they can, then they will say they were incorrect and drop out of the u.s market.

When the largest poker room in the industry announces they're dropping all of the US players, of course there are many rooms that will stay around and try to scoop up all those loose players.

SmackDog · #4 10-12-2006, 04:01 PM

So you guys are thinking that after the 270 days then all online poker rooms will close up shop to US players?

SmackDog

JacksNQueens · #5 10-12-2006, 04:37 PM

That is why I think we will see real division in the poker industry between those rooms in the US market and those out of the US market. I think we will soon no longer see a united poker front about what is best for the future of online poker in the US. PartyGaming and the others if they are smart will pursue a strategy of if we can't be in the market we had better make damn well sure no one else can either. The stakes are too high for them to pursue any other strategy.

Blake
Affiliate Manager
JacksNQueens.com

SmackDog · #6 10-12-2006, 11:09 PM

This is a good point. I hope, but wouldn't be surprised, if you saw PartyGaming start to back the same people who caused them to shut down to the US players. That would in fact be the ultimate irony!

SmackDog

Brandon · #7 10-12-2006, 11:29 PM

PartyGaming would be going down a slippery slope if they do this... when the U.S regulates online gaming, I do not think Party wants to be known as a company that help enforced the ban.

JacksNQueens · #8 10-13-2006, 01:11 AM

If Partygaming doesnt do all it can to keep its competitors from making tons of cash illegally in the US and then competing with this cash against them then I think they wont survive. That is a strong statement but failure to do this would indicate extremely weak leadership that lacks vision and understanding of the consequences of letting their competitors have this lucrative market untouched. Partygaming can't simply hope that the law will be enforced. Well its Friday the 13th somewhere so this is where the rubber meets the road. You heard it here first though...the prediction that the non-US gaming sites will begin to turn on the US-gaming sites...stay tuned.

Blake
Affiliate Manager
JacksNQueens.com

RichTheJerk · #9 10-13-2006, 01:19 AM

First of all, I would like to say Hi, as I am a new member here, but have Legal analysis skills from my tenure and success as a law student.

The 270 day "Window" does not tell when the Law will go into effect. The Law goes into effect the minute that the President puts his signature on the bill. The 270 days is allotted for the banking institutions to implement their system of not allowing credit cards, wire transfers, etc. to be funding offshore gaming establishments.

Therefore, the theory of the Poker Rooms staying in the U.S. Market for the 270 day period is false. All the offshore gambling sites with lawyers looking in to this know that this is true. If it were the other way around, and as you believe it to be, don't you think that PartyPoker and the other publicly traded companies would stay around for another 250+ days to collect as much as they can?

I however will be looking into partnering with Sportsbooks, Poker Rooms, and Online Casinos that are located in Antigua, Costa Rica, and maybe even Canada (i.e. BoDog maybe - waiting on that one just to make sure they don't pulll out once Georgie Signs) that are not afraid of the U.S. Iron Fist that they are wanting to enact.

Just my 2 Cents....

Rich The Jerk

www.RichTheJerk.com

richardb · #10 10-13-2006, 06:55 PM

Mitch Garber, PartyGaming CEO:

"It’s very brave for private operators not to think they will be pursued,” he told the conference. “People are way overconfident about their ability to integrate the law.”
What they should do, he urged, is share the legal and lobbying load with the listed sector. Public companies like PartyGaming had built this industry, he said. They had fought off past anti-gambling moves on the sector and had “financed everybody in the industry until today”, said Mr Garber. “Now we all have to take responsibility.”

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Here is a prediction that I think might happen or one that PartyGaming & Company might try to pursue:

1. The publicly traded companies are going to strike a deal with the UK (later on with the EU), that allows them to host their servers in the UK.
2. They will have a favorable tax rate in the UK comparable to Gilbraltar that will make the transition more feasible.
3. They will seek some sort of certification status and have the UK (and the EU) encourage their residents to only play at those sites. This will try to encourage their residents to stop playing at privately owned sites who currently serve the USA.

Just a wild guess. Looking at Partypoker right now, they have 2 cent 4 cent NL tables. Good luck with the MGR guys!!!