It would appear The Bear has this week ferociously arisen from its den as London's Internet gambling stocks, no doubt abetted by Prime Minister Gordon Brown's Thursday announcement that difficult economic days lie ahead, have taken an absolute walloping.
William Hill, having announced the sale of its Italian joint venture with Codere S.A., dipped 16.40 percent.
"Having gotten 55 units and thinking we needed 200 or 300, you're talking about deploying a lot of capital in a fairly uncertain environment to get up to something that's meaningful," Simon Lane, group finance director of William Hill, told Interactive Gaming News in a telephone interview Wednesday. "And I think we just felt we had bigger priorities for our capital."
May's interim management statement did little to catalyze market bulls -- even Ralph J. Topping's very public interactive presentation last month couldn't bring needed momentum to the group's share price, which has lost 58 percent of its value since October 2007.
Sportingbet fell 9.49 percent despite regaining positive momentum with a third-quarter operating profit of £7.3 million.
The company's decision to more equally distribute revenue-generative activity across its operation -- more specifically, to reduce its dependence on the treacherous Turkish market -- has, curiously, not helped share value, which has fallen 47 percent in the year to date.
Rank Group, whose online arm, Blue Square, continues to perform well, fell 17.87 percent.
Tighter Section 21 machine regulations under the Gambling Act 2005, higher casino duties (per the 2007 Budget) and smoking bans in Scotland, Wales and England have conspired in recent years to damage Rank's casino and bingo arms, Grosvenor and Mecca.
Even Playtech Ltd., whose shares have been on an incendiary ride since May, lost 2 percent.
(Incidentally, its deal to supply Genting Stanley with software for CircusCasino.com could, if successful, generate revenue of $2 million to $5 million by the 2009 fiscal year, according to Numis Securities in London.)
Playtech has proven a buoyant fixture in the year to date, its share price having risen 38 percent.
PartyGaming fell 13.25 percent during a week which saw it launch a financial spread betting offering via a deal with City Index. One United Kingdom analyst told IGN this week, however, he hoped Party had bigger plans for the future.
After a brief rally in early June, on rumors the company was nearing a settlement with the United States Department of Justice, Party's shares have fallen nearly 25 percent.
Ladbrokes lost 8.40 percent.
Shares have trended downward since a May interim management statement, wherein the company revealed a 34 percent rise in gross win and a 24 percent rise in e-gaming net revenue.
The company has lost nearly 46 percent of its share value in the year to date.
888 Holdings fell 10.47 percent, after a strong performance last week on the company's marketing and distribution deal with Sportech.
Like Playtech, Triple Eight has weathered well in this recession; in the year to date, its share value has risen 15.22 percent.
CryptoLogic Ltd. dropped 6 percent, as questions linger over its future with William Hill. The company also lost its software supply contract with Sportech, set for renewal in September 2008, to 888.
Since May, Crypto's share value has fallen 38 percent. Brian L. Hadfield, the company's chief executive, told IGN then that new licensing agreements with OPoker.com and Maharajah Club would be crucial in offsetting stagnation in poker liquidity.
AsianLogic Ltd. dipped 10 percent after an interim trading statement indicated margins, for certain sectors of its online casino business, were under pressure "similar to that faced by land based Asian casinos working with casino junket groups and agents."
For reference, Macau's six licensed casino operators were, for the majority of the first half, locked in a commission battle. The South China Morning Post revealed margins were sacrificed in an effort to win and retain V.I.P. junket agents, who bring in high rollers, provide them with gambling spend and collect debts.
Collins Stewart, AsianLogic's broker in London, did not return a phone call Thursday. According to the company's maiden annual results, casino gaming activities, both on- and offline, accounted for around 92 percent of its revenue.
While the Internet gambling industry achieved first-quarter gross revenue of $3.8 billion, a 25 percent increase over the year-ago quarter, Global Betting and Gaming Consultants have yet to release second-quarter data.
"Our initial conclusion is that the online gambling industry will prove stronger than most, including its land-based counterpart, in the face of an economic downturn," Simon J. Holliday, a partner with the consultancy, told IGN in May on the release of its first-quarter results set.
This week has shown, however, that it's a bear out there.
