Online Gambling shakeup and the little people.
Much has been written on the impact of the recently introduced US anti-igaming legislation. To the companies who counted on US customers for the bulk of their income, the consequences have been nothing short of devastating. These companies have lost millions of dollars in revenue, and in some cases have had their stock valuation reduced to a third of what it was pre-September this year when the US senate voted on the anti-igaming bill. At time of writing SportingBet's AIM share price was at 45.50p.
For investors who had LSE codes SBT (SportingBet), PRTY (PARTYGAMING) or 888 (888 Holdings) the effect was obvious. A huge reduction in the value of the stock meant a contraction of any portfolio contained these stocks. Fortunately the average investor's portfolio contains a very limited percentage of aggressive funds and online gaming stocks fall into that bracket.
But what of the employees of these companies? With any downturn of business, a reduction in operations and marketing is often the where the "human" cost is felt. Recently, Gibralter based gaming outfits Gaming and 888 both announced layoffs. Australian based online gambling operator Lasseters Corporation Ltd announced that it has closed its entire Brisbane customer service operation. These are just the reported firings. Even for those non-PLC US facing companies there was a HR cost. For those buying media, be it on the internet or the more traditional TV, Radio and billboard, the future was obvious. Media companies would not place Online Gambling advertising and therefore those working in media departments could effectively not do there jobs. They were, effectively, also out of a job for the most part. An anonymous employee at a well known media house that served the online gaming industry reported "I know of lay offs in the media departments of 2 very well known sportsbooks who have their marketing departments based in Vancouver."
Many of the customer service representatives, media buyers and ancillary staff that lost their jobs do have transferable skills. The economies of Canada, Gibraltar and Australia are buoyant and they have a fair chance of integrating back to the labor pool quickly. It is those amongst the unreported layoffs in place like Costa Rica and Curacao that have the most to lose. In those jurisdictions, lower level jobs in the gambling industry pay well over the average wage.
For those people, the US anti-igaming bill had the biggest impact.
posted by Ian of egamling pulse
