Market Report: Regulation fears cause PartyGaming to drop - Sharewatch, Business - The Independent: "Fears of Europe being hit by strict regulations on internet gambling caused one of the sector's biggest names, PartyGaming, to take a tumble last night.
The Gibraltar-based firm is set to merge with the Austrian company bwin in the first quarter of 2011 to create what would be the world's largest online-gambling company, but Davy has revealed that it is worried about the fact that key markets are expected to introduce regulations which could result in uncertainty around the stock.
'We have become increasingly concerned about the impact regulation of European markets will have on bwin-PartyGaming as they make the transition from unregulated to regulated markets,' said the broker, which downgraded both companies to 'underperform'. 'In theory, the regulation of European markets should be a good thing for online operators.... The problem arises when one or more products are prohibited under new regulation or when tax rates are prohibitively high.'
Following the research, PartyGaming ended the session on 239p, a drop of 13.5p. It has endured a rough run recently, with the US midterm elections preying on the minds of investors. Democrat Harry Reid, a supporter of the gambling industry, has found himself in a battle to retain his US Senate seat for Nevada."
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