Irish stockbroker downgrades PartyGaming

Davy downgraded PartyGaming and Bwin

Ireland’s largest stockbroker Davy voiced concerns that increasingly regulated markets across Europe could introduce an unacceptable level of ‘uncertainty’ into the online gaming’s company’s prospects. While it was only last month that PartyGaming head Jim Ryan claimed the spread of regulation across Europe’s markets would produce a level playing field, the Irish broker has downgraded both Party and Bwin stocks to ‘underperform’.

According to Davy: “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.” This last point was made clear when companies operating in the newly regulated French market openly complained at the Monaco iGaming Exchanges about how the stipulated lousy odds and poor rate of return were causing French punters to seek out operators not licensed by the state.

Party’s shares were already down over concerns that whatever momentum there was for licensed online gaming in the US would dissipate in the wake of the midterm elections. Following Davy’s pronouncement, which was seconded by stock research firm Exane BNP, the stock dropped another 13.5p per share. Choosing to focus on the positive, Party people claim their merger with Bwin is proceeding apace, and is expected to be concluded in March 2011