The Department of Justice has ordered some big investments banks to hand over any "documents that will help build a case against anyone that could have profited from online gambling in the United States." This has caused Partygaming stock to go down the last couple days. It is trading around 26-27p currently.
I think this is an overreaction. Ironically, I think this is a positive for Partygaming.First of all, it seems DOJ is going after people and not the company. In Partygaming's case, the main victim will be the founders, who cashed out hundreds of millions in stock. Second, if DOJ makes an equal effort in going after other private poker companies, who are currently breaking the law, such as Pokerstars, FullTiltPoker and Bodog, it could be a huge positive for Partygaming. If DOJ can force these companies to stop taking bets from US players, you could see international players who play on these sites migrate over to Partypoker. This has occurred to some degree when Neteller, a ewallet site that is used to fund poker accounts, closed its doors to U.S. players. After Neteller went down, the number of players at these private poker companies has slowly been going down while PartyPoker's number of players has been steadily going up.
Another company that caters to only international players is Everest poker. Unlike PartyPoker, it has never taken a bet from U.S. players. So, it is clear from DOJ's wrath. Everest poker is owned by Gigamedia (GIGM). I think both Partygaming and GIGM are good stocks to buy. The number of cash players for both has been increasing nicely. Currently, Partypoker is the number 2 poker site in the world and Everest poker is number 4. I own around 40,000 share of Partygaming and I'm considering buying into GIGM.
In other news, I bought an another 1,000 share of VRTB and they did announce a .05 cent dividend for this month. Currently this company pays out a 12% dividend and it should be able to pay a 10% dividend comfortably.
