The Fall of PartyGaming
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Case Details:
Case Code : ITSY056
Case Length : 15 Pages
Period : 1999-2006
Pub Date : 2007
Teaching Note :Not Available
Organization : PartyGaming
Industry : Online Gambling
Countries : US/UK
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Introduction Contd...
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However, the introduction of the UIGEA badly affected PartyGaming's share price.
Since October 01, 2006 the company's share price had been consistently going
down. On November 30, 2006, the closing price of PartyGaming share was GBP 26.505
(Refer to Exhibit I for a stock chart of the company during 2005-06). As of
December 2006, PartyGaming was planning new strategies to regain its lost
business. According to company sources, it had decided to pay more attention to
the European and Asian markets. It was also planning to come up with some
innovative skill-based games instead of only offering gambling games. However,
only time would tell how successful the new strategies would prove to be.
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About Partygaming
PartyGaming was founded by Ruth Parasol (Parasol). In the early 1990s, after
graduating in law from the University of San Francisco, she joined her
father Richard Parasol (Richard) in his adult entertainment business. In
early 1996, Parasol became one of the co-founders of the Internet
Entertainment Group (IEG), a pioneer in Internet pornography. However, in
late 1996, IEG was involved in several lawsuits for alleged unfair and
deceptive business practices such as false billing. Parasol was forced to
sell her stake in IEG and so cut off all ties with the pornography industry.
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However, by this time, Parasol had generated enough
capital to start a new business and she launched an online gambling
business known as starluckcasino.com (Starluck) in 1997. The software
that Starluck used was licensed from a third party developer.
It offered virtual slot machines, blackjack6,
and other popular casino games. Soon after, Starluck changed its name to
iGlobalMedia and operated a network of gambling websites that offered
games like poker and bingo. The company was headquartered at Gibraltar,
a UK-based overseas territory7.
According to the company's website, iGlobalMedia was regulated and
licensed by the Government of Gibraltar... |
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