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Worlds Collapse in the face of UIGEA Signing

October 17 2006, Falstaff

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In the ongoing "should I stay or should I go" saga of online poker in the US, the first casualty has been reported. World Gaming, owner of BetonUSA.com and Sportsbetting.com, has had trading of its shares suspended on the London Alternative Investment Market in the face of its impending collapse.

With a heavy reliance on US customers, World Gaming saw its debt load increase to $23 million early in October, and Friday saw the resignation of CEO Daniel Moran and CFO David Naismith. World Gaming Board Chairman James Grossman left the board of the company last month in the face of this impending legislation and the arrests of other online gambling site personnel in the US.

In other UIGEA news, Empire Online, owner of Empire Poker, announced the closing of its US operations, and a redirection of corporate activities away from internet gambling. CEO Noam Lanir told analysts that he "saw no future for online gambling in view of the changing legislation in the field."

Empire still expects to pay stockholders a modest dividend this quarter, but stated that roughly 65% of their business came from the US market. According to the UK paper "The Guardian," Empire will use part of its $260 million cash reserves to explore markets outside the gambling arena.

*Thanks to Dan Michalski for information for this article.*

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