2nd Oct 2006 07:02
PartyGaming Plc02 October 2006 2 October 2006 PartyGaming Plc United States legislation On 30 September 2006, the United States Congress passed The Safe Port Act. Thatmeasure also contained certain provisions known as the 'Unlawful InternetGambling Enforcement Act of 2006' that will affect the processing of paymentsbetween US customers and online gaming companies, including PartyGaming, thatare publicly traded and licensed and regulated in respected jurisdictions. The Act is expected to be signed into law by President Bush within the next twoweeks. If signed into law, it will immediately make unlawful the receipt by agambling business of proceeds or monies in connection with unlawful internetgambling. The Act does not clarify the definition of unlawful gambling.However, as the first piece of Federal legislation dealing explicitly withinternet gaming, it does make clear that the US government intends to stop theflow of funds from Americans to online gaming operators through criminalsanction. The Act also asserts that, under US law, a wager must be permittedunder the laws both of the customer's place of residence and that of theoperator. After taking extensive legal advice, the Board of PartyGaming Plc has concludedthat the new legislation, if signed into law, will make it practicallyimpossible to provide US residents with access to its real money poker and otherreal money gaming sites. As a result of this development, the Board ofPartyGaming has determined that if the President signs the Act into law, theCompany will suspend all real money gaming business with US residents, and suchsuspension will continue indefinitely, subject to clarification of theinterpretation and enforcement of US law and the impact on financialinstitutions of this and other related legislation. Access to PartyGaming'sonline gaming sites for the Group's US free play customers will be unaffected.Access for all of PartyGaming's non-US customers will also be unaffected. The Group's strategic focus remains on developing its existing markets outsideof the US and on developing new markets and products. Should activities in theUS be suspended, the Directors will also seek to re-align the Group's cost baseto accommodate the changed business environment. However, any such suspensionwould also result in the Group's financial performance falling significantlyshort of consensus forecasts for 2006 and 2007. Mitch Garber, Chief Executive Officer of PartyGaming, said: "This development is a significant setback for our company, our shareholders,our players and our industry. While US horse race betting, state lotteries,fantasy contests and certain other online gaming activities have beenexclusively protected under the new law, we are disappointed that the popularityand skill of poker in particular have not also been specifically protected. TheBoard respects the laws of the US Government, and will continue to analyse theirapplicability, but also continues to believe that a regulatory framework foronline gaming, including poker and casino gaming is the only sustainable longterm solution. "We have a substantial gaming business outside the US, one that is highlyprofitable and growing rapidly on one of the most technologically advancedplatforms available. In the first half of 2006 our non-US business generatedrevenues of $150 million, a 151% increase over the comparable period in theprevious year. Gaming on the internet is already a popular form ofentertainment for millions of adults and we will continue to expand our businessinto new territories, offering fun, responsible and friendly competition in asafe and secure environment for customers around the world. PartyGaming is byfar the largest online gaming company in terms of non-US business and liquidityand we intend to focus on and increase our advantage in that area." A further update will be provided with the Q3 KPIs on 20 October 2006. Contacts: PartyGaming Plc +44 (0)20 7337 0100 Peter Reynolds, Director of Investor RelationsJohn Shepherd, Director of Corporate Communications Financial Dynamics +44 (0)20 7831 3113 Edward Bridges / Juliet Clarke This announcement includes statements that are, or may be deemed to be,"forward-looking statements". By their nature, forward-looking statementsinvolve risk and uncertainty because they relate to future events andcircumstances. Forward-looking statements may and often do differ materiallyfrom actual results. Any forward-looking statements in this announcement reflectPartyGaming's view with respect to future events as at the date of thisannouncement. Save as required by law or by the Listing Rules of the UK ListingAuthority, PartyGaming undertakes no obligation publicly to release the resultsof any revisions to any forward-looking statements in this announcement that mayoccur due to any change in its expectations or to reflect events orcircumstances after the date of this announcement. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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