Online Casinos Flotation is Expected Despite Recent Drop in Stock Value

Investing in online casinos has been a recent focus for many online gamblers and financial advisors since the flotation of several large internet betting companies.  Party Gaming and its sister site Casino 888 are two companies that have been getting most of the attention as of late, since Cassava Enterprises (who owns both casinos) announced it is still planning to flotate Party Gaming and Casino 888 on the London Stock Exchange come September 29.

The stock price has gone up and down since Cassava first revealed its intentions to flotate.  What was originally estimated at approximately $1.5 billion, has now sunk to an estimated $1 billion.  There are numerous reasons for this decline - notable the speculation that many investors have about the online casino gambling industry in general.  Although online casinos are now fully regulated in the UK (and Cassava is based in Gibraltar - a UK territory conforming to the Gambling Bill standards), many potential investors reside in the U.S., where online gambling walks a tightrope on the issue of legality.

Another factor that is likely heavily influencing the stock value is the performance of 888 Holdings, which is the parent company of 888 casino.  The business has not been doing as well as it has in the past, probably due to a sharp rise in strong competition from online poker sites and other online casinos.  Despite this, 888 Holdings say they are expecting to make over $320 million when the flotation takes place, after which, the company plans to sell off 25% of its stock.  It is likely that the stock will not regain its original value, which Party Gaming is now selling off at approximately $100 per share through their corporate website online.