ITS AN ILL WIND....
12 June 2009
Bankers find positives in latest US action
against cash processors
The latest action by the US Attorney's office for the
Southern District of New York against US online gambling
cash processors (see previous InfoPowa report) could
have a beneficial side-effect on Euro-centred online
poker operations such as Party Poker and Playtech,
reports The Times newspaper in the UK.
The
newspaper quoted Deutsche Bank analysts who pointed out
that US-active online poker companies like PokerStars
and Full Tilt Poker are the real targets for the actions
against the processors. One of the major advantages
these sites have over their European-focused rivals is
the continued, if risky, access to a huge US market
still playing despite the UIGEA.
This gives the
US-facing sites greater player liquidity and the ability
to mount more aggressive promotional and marketing
initiatives, attracting many European and Asian players
to their action.
However, should those legions
of American players become insecure or concerned about
their deposits in PokerStars or Full Tilt, and be
"forced off the Web" by this sort of enforcement action,
it could mean that the liquidity advantage would
decrease, and European and Asian players would gravitate
back to the non-US operators where there was less hassle
and risk.
Deutsche Bank analysts said: “If this
action is the start of a bigger move by US authorities
to clamp down on those sites, then this should be
materially beneficial for the next-largest providers of
poker liquidity, Playtech and PartyGaming, as we would
expect to see non-US players migrating away from
PokerStars and Full Tilt.”
The analysts pointed
out that the current action, which involves about $33
million in deposits belonging to some 27 000 players
being frozen, was not in and of itself critical in a
financial sense to major companies like PokerStars and
Full Tilt. However, “....player trust is critical and
you don't need to freeze all player funds in order to
have a material impact on confidence and liquidity. Even
if this doesn't lead to a full crackdown, anything which
affects the players' confidence in the US-facing sites
is a clear positive for the listed online poker
operators in our view”, the bank said.
The
market seemed to have been of the same view this week,
with shares in the big European online poker groups
going up between 5 and 6 percent as news of the US
enforcement action sank in.
Online Casino News Courtesy of
Infopowa
More news here.
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