The recently enacted law that seeks to ban internet gambling in the United States has created some very strong waves in the online gambling industry. So strong in fact that it has forced PartyGaming to cancel its interim dividend to its stockholders and forcing it to enter into discussions with banks over new arrangements for loans.According to PartyGaming, it has decided to cancel the interim dividend of about three cents per share that it was scheduled to be paid on October 31 so that it can spend the money on acquisitions instead. The total money that the company will be using is $120 million.
The company will now also negotiate a new loan facility with its banks in the next 30 days upon the signing of the gambling law by US President George W. Bush.
Based on a clause in the online gaming company’s $ 500 million loan agreeement, the company will allow its lenders to call in the loan in the eventuality that an alteration in the law of the United states will affect the position of PartyGaming in the country. This stipulation is what prompted the move for the renegotiations.
The new anti online gambling stance of the government is really affecting many businesses. And these companies, on the other hand, are doing its best to try and adap to this new hostile environment. This could probably be seen as a period of challenges for online gambling companies and those who emerge from this intact could be seen as the long-term players in this lucrative industry.