Two of the largest European operators of Internet sites paris, PartyGaming and Bwin Interactive Entertainment, said Thursday they intend to merge, forming largest publicly traded company in the world of online gaming.
The deal comes at a time when a number of governments in Europe and the United States is easing the rules on online games, hoping to tax on business and use the revenue to reduce deficit gaping budget.
"We will immediately be a leader in these markets as they open," the CEO of PartyGaming, Jim Ryan, said Thursday during a conference call.
PartyGaming, whose shares are traded in London, was formerly the biggest poker site on the Internet, but it has been hard hit by a wave of repression in the U.S. on online gaming which was adopted in 2006. The company immediately withdrew the country, costing more than three quarters of its business and cede the market to private companies based in offshore locations, including PokerStars and Full Tilt.
On Wednesday, the Financial Services Committee of the House of Representatives approved a bill that would overturn the 2006 law. Proponents say tax paris internet could bring as much as $ 42000000000 for the government over 10 years.
In Europe, Italy and France has recently started allowing private gambling sites belonging to operate in competition with the state-controlled monopolies. Other countries are considering similar action, enabling them to tax paris on the Internet, a company worth nearly $ 30 billion worldwide, according H2 Gambling Capital, a consulting firm.
Until now, online gaming has worked in a legal vacuum in all Europe, with governments, either officially or able to tax it. These changes could provide opportunities for online gaming companies such as PartyGaming and Bwin to expand their operations, analysts said, but could also create new financial pressures. http://jodnet.blogspot.com
"They are not an environmental tax to an environment of high taxes, and it is difficult," said Warwick Bartlett, CEO of Global Betting & Gaming Consultants. "This is an agreement that has been done out of necessity than choice."
The merger would bring together the companies which in 2009 generated gaming revenue of 682 million euros, or $ 893 million and earnings before interest, taxes, depreciation and amortization of 196 million euros. Under the merger agreement, Mr. Ryan PartyGaming would share the role of CEO Norbert Teufelberger, which is currently co-chief executive of Bwin, Manfred Bodner. Mr. Bodner will become a non-executive director.
Analysts say that companies are good because Bwin has a strong presence in paris sports while PartyGaming is the largest online poker and casino games. The operation would allow them to reduce costs and cross-promote the other sites, which could reach new customers.
The shares of both companies surged Friday, on news of the affair, which follows months of speculation that Bwin and PartyGaming could merge. Now, say analysts, the consolidation should continue in the industry.
The deal comes at a time when a number of governments in Europe and the United States is easing the rules on online games, hoping to tax on business and use the revenue to reduce deficit gaping budget.
"We will immediately be a leader in these markets as they open," the CEO of PartyGaming, Jim Ryan, said Thursday during a conference call.
PartyGaming, whose shares are traded in London, was formerly the biggest poker site on the Internet, but it has been hard hit by a wave of repression in the U.S. on online gaming which was adopted in 2006. The company immediately withdrew the country, costing more than three quarters of its business and cede the market to private companies based in offshore locations, including PokerStars and Full Tilt.
On Wednesday, the Financial Services Committee of the House of Representatives approved a bill that would overturn the 2006 law. Proponents say tax paris internet could bring as much as $ 42000000000 for the government over 10 years.
In Europe, Italy and France has recently started allowing private gambling sites belonging to operate in competition with the state-controlled monopolies. Other countries are considering similar action, enabling them to tax paris on the Internet, a company worth nearly $ 30 billion worldwide, according H2 Gambling Capital, a consulting firm.
Until now, online gaming has worked in a legal vacuum in all Europe, with governments, either officially or able to tax it. These changes could provide opportunities for online gaming companies such as PartyGaming and Bwin to expand their operations, analysts said, but could also create new financial pressures. http://jodnet.blogspot.com
"They are not an environmental tax to an environment of high taxes, and it is difficult," said Warwick Bartlett, CEO of Global Betting & Gaming Consultants. "This is an agreement that has been done out of necessity than choice."
The merger would bring together the companies which in 2009 generated gaming revenue of 682 million euros, or $ 893 million and earnings before interest, taxes, depreciation and amortization of 196 million euros. Under the merger agreement, Mr. Ryan PartyGaming would share the role of CEO Norbert Teufelberger, which is currently co-chief executive of Bwin, Manfred Bodner. Mr. Bodner will become a non-executive director.
Analysts say that companies are good because Bwin has a strong presence in paris sports while PartyGaming is the largest online poker and casino games. The operation would allow them to reduce costs and cross-promote the other sites, which could reach new customers.
The shares of both companies surged Friday, on news of the affair, which follows months of speculation that Bwin and PartyGaming could merge. Now, say analysts, the consolidation should continue in the industry.
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