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Positive outlook for Party Gaming shares

Three months ago, Party Gaming looked to be in a spot of trouble. Having gone public on the London Stock Exchange not long before, a negative forecast about the amount being wagered at the online gambling giant by new gamblers sent shares plummeting, wiping out the billions of pounds sterling which had been gained by Party Gaming before the announcement. Since then, only a trickle of online casinos IPOs have been released and the industry has been cautious about the future in a much more volatile economic environment for online casino companies compared to the period prior to the Party Gaming IPO.

But this week, analysts at the HSBC international bank saw a more positive future for the owner of the Party Poker and Party Bingo online gambling websites. “We expect continued growth from its current core market, benefits from the data mining project started this year and new game offerings will drive top-line growth,” wrote Richard Wainwright, analyst for HSBC. “PartyGaming’s de-rating has nevertheless had a significant impact on the sector… As a result, we believe the online gaming sector is now relatively undervalued versus its growth rates.”

Party Gaming, Sporting Bet, and 888 Holdings are among the elite few online casino companies which have gone public in recent months or for some time longer. Whether or not even more online casinos will go public with their own shares is largely dependent on whether or not Party Gaming, one of the biggest players in the online casino world, is successful over the next year or so with its performance on the London Stock Exchange. Too, keep an eye out for the possible licensing of online casino companies in the UK, which if taxes are competitive enough will allow them to base their servers there, which has previously not been allowed.

OCA News Editor

Jenny McKinnley is OCA’s financial correspondent. After spending years on the trading floor in both NY and London, she offers insight from the inside out on world financial news and events.

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