I like the stock market. It's a risk, and it's unpredictable, and essentially it's my favorite form of gambling. I have better luck with stocks than I do with cards. This is partly due to the fact that I suck and have never bothered to learn proper strategy (even though I know that if I did I would play much better, but I have never claimed to be a professional player by anyone's stretch of the imagination) and because I actually enjoy reading all of the quarterly reports and figuring out how a company is doing, what the risks are, and how I think they will do in the future. This does me better than pushing a button on a slot machine, where sometimes I will do well, but typically I do crappy. The reality is, I don't actually know that much about stocks. I only put out a mildly stronger effort with stocks than I do with cards. This is a new game for me and I am slowly learning all of the strategies and ways of looking into information. Heaps of internet gaming casinos and poker rooms have been listing on the London Stock Exchange lately and it's been a lot of fun trying to decipher the way and meaning of the market.

As I mentioned, loads of internet gaming casinos and poker rooms have been going public lately. One of the most publicized was Partygaming which did really well for the first few weeks, then had a negative press release stating that their growth will not be as big as expected for their first quarter public, and the stock has since crashed all to hell. It's now down to 85.47p when it was once up over 150.00p – that is a heavy crash from a small profit warning. 888.com has now listed themselves, and they lowered their initial price expectation after the crash of Partygaming. This has left the whole industry wondering just where the money is in the stocks of online gaming.

Years ago every internet gaming casino and alternative deposit method you would invest in turned into gold. Cryptologic is an internet gaming software manufacturer. They make a nice product but most of the internet casinos that choose them have sketchy at best reputations. They are the least expensive of the software manufacturers out there to license from. Cryptologic's price went from $3 in 2003 to over $30 earlier this year. They too are having some PR problems and have seen their stock lower to $16.53. Neteller was another company known for growth. Neteller is the blue chip standard of alternative payment methods. There isn't an internet gaming casino or poker room which doesn't accept them as a payment method. They too have seen a decline in recent days. In 2004 they were trading for 15.50p, they went up to over 900p and are now down to 821.00p.

Cryptologic has crashed because they issued a statement where they will be losing one of their major accounts. Partygaming issued a warning regarding profit per customer. Neteller, however, issued no such warnings and is simply relaying from the backlash of the first two. It will be interesting to see where the market heads for these companies in the future. The Partygaming fiasco will probably keep many potential public companies private as they want to wait out the worst of the storm. The industry as a whole has taken a hit from this and is waiting for the backlash to recover. From here will be consolidation. It seems that forgiveness will not be happening and while these companies were based on profits and bottom lines (unlike the dot.coms) and no one is predicting the demise of the industry, it is not the pot of gold at the end of the rainbow that it was once predicted to be. For now I will be watching and playing my game in fun mode, waiting till I know and understand enough to play for real.

Posted on: November 15, 2005

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