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PokerTip: Dangerous To Be Chairman
Poker Stock Market
By WagerWeb.com and Ecobika Sports Betting
Slightly different topic this week folks ... instead of picking a few potential tournament winners, I am going to discuss betting on poker as a whole! Reports have been circulating on the Internet for a few days about the recent arrest of Sportingbet chairman Peter Dicks. With the U.S. cracking down on online gaming, there have been numerous such arrests in the past few months, and it has the same effect on the market every time … stocks drop for a couple of weeks before getting back to even and then rising higher than ever before. The online gaming industry will not die easily!
The first major instance we saw of the U.S.' tough new stance was with the arrest of the CEO for BetOnSports.com, a major global online gaming and sportsbook site. The arrest not only affected BOS but also other major players in the industry, most notably Party Gaming – the mother company for Party Poker, Party Bingo, etc. Stocks fell with Party, 888.com and other large publicly traded online gaming sites, ranging from a 5-15 percent drop. The future for the industry looked unclear and the effects unknown.
However, less than a week later the stocks had returned to a normal level as investors realized that it was a very lengthy process for the U.S. government to fully shut down an essentially international business. It’s worth noting at this point that almost all online gaming sites are based in countries with little or no legislation – in fact, encouraging businesses to set up there with tax break offers and other financial incentives.
Now, in the past few days stocks have once again dropped across all the big industry players ... due to Dicks being arrested – and his future is unclear. The U.S. government is determined to make examples of anyone it can catch, sending a strong message that it means business! Following the arrest, Party company's stock fell 10 percent, 888.com’s fell over 15 percent and Empire Online fell a little over 3 percent. Sportingbet’s stocks fell 2 percent before the company froze all trading of its stocks pending further developments in the charges against Dicks. I fully expect to see these stocks bounce back almost immediately – certainly within 2 weeks; they will be back to more than they were before the arrest.
Furthermore, Party has just released its latest financial report, and the figures are amazing. Figures for the company continue to break records every month. Profits are up 51% for the first 6 months of 2006 compared with the same period for 2005, and the company is in a major push to develop business outside of the U.S., most notably across Europe. The company has recently relocated its head offices to Gibraltar for mostly financial reasons, though surely for legal reasons too. In addition to its continued growth, it also is making efforts to buy out its competitors.
So, when there are no tournaments to bet on it is always interesting to take a look at the industry as a whole. If you can catch the first publication with the latest arrest or government imposition on online gaming, you can always expect stocks to drop instantly … but at the same time strong companies will always bounce back. If Party is making more than million net profit per day, you can be sure it will not give up without a fight. A 10 percent drop in stock value has major financial effects on such a large company, so all senior staff will be working double time to get it back on track.
The window of opportunity to catch the stocks at their low mark before they bounce back is very short, but if you keep your eye on the ball you can net a golden opportunity. Betting on Party’s continued growth and industry domination is the closest you can get to a sure thing in this business, and with the tidy profit you will make sure the party will then be on you!
About the Author: Meantime play Poker, it is profitable. Ecobika Sports Betting