ADIOS BARCELONA

4 October 2007

EiG draws to a close on an optimistic note


Three days of presentations and networking came to an end Thursday with the closing session of the European Interactive Gaming Congress and Expo which traditionally examines the opportunites and threats ahead.

Mitch Garber, the CEO of online gambling group Party Gaming probably offered the clearest view, starting by contrasting the mood with that prevalent a year ago, when the United States president signed the Unlawful Internet Gambling Enforcement Act into law, precipitating the withdrawal of companies from that market and adversely impacting many international groups that had depended heavily on American players.

Garber termed what followed a 'momentum switch' as companies built new and more geographically diverse customer bases, moved into new sectors of the industry from previous comfort zones and increasingly attended to compliance and governance issues.

The result has demonstrated once again how resilient an industry online gambling has become, with many companies, including Garber's own, recovering the numbers lost in the American prohibitionary debacle...and there is a new optimism as that momentum continues forward.

Garber remains confident in the future, including developments in the United States where he believes that a series of legal, business and political events, and the interest of the large terrestrial gambling groups in that country could bring about a regulated online gambling environment within the next 5 years.

When that happens there will be a demand for the unique and specific business and technical skills that the online gambling industry has honed over years in the business, and that could lead to consolidation through mergers and acquisitions designed to capture those skills to ensure commercial success.

Existing and highly experienced industry companies dominated the market, and ground level entrants would find penetrating it successfully a daunting task without alliances.

But it will be a slow, controlled process rather than a sudden turnabout, dependent partly on the ability of the industry to show capability and will in excluding underaged and problem gamblers, together with criminal elements and (allegations) of money laundering.

The US land gambling business tended to be low margin and high capital expenditure, whilst for online gambling the reverse applied, making the two a good business match.

Garber was similarly buoyant about the often frustrating and confusing European market which has been very much in focus over the past three days at EiG.

He said that his feeling was that good progress was being made on the EU scene and that ultimately good business and political sense would prevail, to the advantage of everyone.

It was a solid and encouraging note on which to end a congress which has examined every aspect of the industry, delivered its customary abundant opportunities to network and showcased the remarkably creative and vibrant energy and investment in new technology and game products that ensure continued operational success.

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