It really staggers me that Party is pulling out of the US market [Archive]

dibbs

10-11-2006, 08:59 PM

The Party higherups didnt just make the decision on their own, they definitely consulted lawyers, probably not cheap ones either, and the lawyers interpreted the language in a way that obviously said possible jail time for the big guys at Party.

Under pressure, if a lawyer tells you theres a decent chance youre going to be spending years in a cement box and sharing showers with felons instead of relaxing in penthouses across the world, do you gamble?

They apparently reacted too quickly, they took the cautious route, and theyll pay for it.

Pokeraddict

10-11-2006, 09:00 PM

I have a feeling Party has something up their sleeve. I did not at first but as time goes on and listening to other's thoughts I have begun to wonder.

whangarei

10-11-2006, 09:05 PM

[ QUOTE ]
I have a feeling Party has something up their sleeve. I did not at first but as time goes on and listening to other's thoughts I have begun to wonder.

[/ QUOTE ]

I think it's too late. You don't just drop some 80% of your customers and expect them to come back once you reveal your "secret plan." Google "network externality."

permafrost

10-11-2006, 09:06 PM

[ QUOTE ]
I have a feeling Party has something up their sleeve. I did not at first but as time goes on and listening to other's thoughts I have begun to wonder.

[/ QUOTE ]

nice teaser. now share "something".

JPFisher55

10-11-2006, 09:20 PM

The two founders of Party Gaming made the decision for themselves not Party Gaming. They have cashed out over $1 billion since they took the company public. They want to be able to travel to the US. So they let the company go under by their decision. They warned all their shareholders about this risk and they are not subject to shareholder lawsuits like they would be if Party Gaming was a US company.

HumanACtor

10-11-2006, 09:24 PM

[ QUOTE ]
The two founders of Party Gaming made the decision for themselves not Party Gaming. They have cashed out over $1 billion since they took the company public. They want to be able to travel to the US. So they let the company go under by their decision. They warned all their shareholders about this risk and they are not subject to shareholder lawsuits like they would be if Party Gaming was a US company.

[/ QUOTE ]

This explanation makes no sense.

They tank their company into oblivion so that they could travel to the US? Why not step down?

JPFisher55

10-11-2006, 09:29 PM

They are the two founders. They own alot of the stock. Due to numerous factors, they cannot sell all their stock. They cannot just step down as controlling shareholders. Also, they may be able to sell the shares of the shell for some additional cash.

DavidNB

10-11-2006, 09:35 PM

[ QUOTE ]
The two founders of Party Gaming made the decision for themselves not Party Gaming. They have cashed out over $1 billion since they took the company public. They want to be able to travel to the US. So they let the company go under by their decision. They warned all their shareholders about this risk and they are not subject to shareholder lawsuits like they would be if Party Gaming was a US company.

[/ QUOTE ]

They would be subject to lawsuits in the UK if this were true

JPFisher55

10-11-2006, 09:47 PM

Party Gaming is not a UK company. Since they warned potential shareholders about this risk, they are likely not subject to alleged violations for security fraud. Breach of corporate fiduciary duty would be their potential problem.
Laws concerning the fiduciary duty owed by controlling sharelholders, directors and officers are governed by state law in US or local law in other countries. Party Gaming is based in Gilbralter. I doubt that Gilbralter has many laws concerning corporate breach of fiduciary duty. In the US, different states have different laws which means bringing litigation alleging breach of fiduciary duty can be harder in some states than other ones. I think that it is harder in UK than in most states. But in Gilbralter; probably non-existent.
Other threads link to an article from Business Week about the two founders and this topic.

Utah

10-11-2006, 10:01 PM

This doesnt make sense. If I screwed shareholders out of billions the last thing I would worry about is a lawsuit.

gonebroke

10-11-2006, 10:07 PM

All the public companies are bailing and the private ones are staying. How hard is it to figure out?

Harkey

10-11-2006, 10:32 PM

I'm glad to see Party dropping out, and I'll leave it at that. I'll be spending most of my time on PStars.

TruePoker CEO

10-11-2006, 10:33 PM

What they have is simple:

a residual marketing campaign for the US, every time the WSOP is shown,

a monster marketing database,

a largely indifferent clientale,

someone else willing to fight the fight for them (PStars), and

a profitable business outside the US.

Do not think for a minute that thousands and thousands of players won't flock back to Party every day if it re-enters the US market.

I really think it is that simple.

brendanb438

10-11-2006, 10:35 PM

Has everyone who is still playing on Party started to spam the crap out of tables telling people to play at PStars, WPEX or FTP yet? Do it!

-Brendan

Greg Miller

10-12-2006, 01:32 AM

Let me be the first to use the sentence "Hey, you remember a site called Party Poker?" I suspect you'll be hearing it again in the future.

Synergistic Explosions

10-12-2006, 01:46 AM

Next thing we find out is ProPoker is buying out Party and renaming the new company PokerSpot, while announcing Dutch Boyd as the new CEO.

OasisG

10-12-2006, 02:00 AM

lol Dutch Boyd... what disorder did he get?

callme

10-12-2006, 02:26 AM

I think one problem, Party might see is, that they have decided to be greedy and take a shot at the casino business adding more and more games which has nothing to do with skill anymore and therefore taking direct bets from customers, where Party is the other side of the bet.

Other sites didn´t took such a heavy approach on casino games (even most added BJ) and don´t see a big change in their current operations compared to the past after the new bill.

Still i can´t understand that quick decision from Party either, cuz, however you put it, there would have been other posibilities (like closing down the casino business for non US-Players) and i just can´t see how you can research and get legal advice on all those scenarios within two days.

To those who say, customers will come back. I dont think you already saw the huge migration of the bulk of people to other sites, but when this bulk starts moving to sites like Stars or whoever might offer them the best of it (and they will start moving when they finally cant play anymore) you won´t see them coming back anytime soon if Party reenters the market - why should they? Just think about the other case - if anything would be like before the bill, why should bulkloads of people start moving from Party without anything big happening.

You can see lots of examples on the internet for such scenarios (Ipod / Google / Ebay - how many competitors with huge budgets and invested time try to grab market share and have no chance).

So no - once they give up there marketleadership they wont get it back as long as the other sites who welcome these players don´t screw up.

PairTheBoard

10-12-2006, 02:39 AM

[ QUOTE ]
So no - once they give up there marketleadership they wont get it back as long as the other sites who welcome these players don´t screw up.

[/ QUOTE ]

Right. The players will go and stay where the games are and after Saturday the games won't be at Party anymore.

PairTheBoard

Vavavoom

10-12-2006, 03:14 AM

On one hand this is great news for me as I have been playing on Stars for the past month or so exclusively....

The games have been great....However, I would go back to Party, as the games have always been better there and RB makes a big difference to my bottom line....

If Stars offered RB, then they could shut down Party completely....

But they don't and I'll still play there..... But then I can still play at Party...and may continue to do so depending on games....

Vava

Sniper

10-12-2006, 03:21 AM

[ QUOTE ]
But they don't and I'll still play there..... But then I can still play at Party...and may continue to do so depending on games....

[/ QUOTE ]

Like the huge overlay there will be in this Sunday's big tournie /images/graemlins/wink.gif

blackize

10-12-2006, 03:25 AM

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Like the huge overlay there will be in this Sunday's big tournie

[/ QUOTE ]

Expect that to be cancelled, have a decreased guarantee, or not be guaranteed at all this week.

Pokeraddict

10-12-2006, 03:42 AM

Ever consider Party might be courting a US company for a takeover? By booting US players it opens the door for a US casino or media company to buy them. This would give a huge voice on our side too if this was happening. This is what I mean by "something". Do I have proof? No. Does it make sense? Yes. No matter how much value Party has lost it is still worth almost $3 billion dollars. To a company that thinks they can lobby their business legal that is a steal with all the database of players and branding they have.

Of course that is just my opinion. Someone put this idea in my head and the more I think about it the more sense it makes. Something is going on behind the scenes, they are not just laying over and dying.

blueodum

10-12-2006, 04:02 AM

The ONLY thing Party had going for it was volume of traffic. The gaming experience is awful. Now that they will be just another top 10 site in terms of traffic, there will be no mass return. Remember, Paradise once ruled the roost, now they are falling further behind Full Tilt and Stars every month.

AlexM

10-12-2006, 04:36 AM

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The ONLY thing Party had going for it was volume of traffic.

[/ QUOTE ]

Never underestimate the power of a Brand Name.

callme

10-12-2006, 04:55 AM

Sure branding is everything (for the moment), but imagine Coke or Ebay giving the boot to its customers and telling them to come back in a year - in the meantime try the competition. I guess the competition wont be that stupid and let them go again and their brand develops naturally with the customer base - such processes can go very fast. YouTube is the best example how extremly quick a brand can be developed.

Vern

10-12-2006, 07:20 AM

[ QUOTE ]
Sure branding is everything (for the moment), but imagine Coke ... giving the boot to its customers and telling them to come back in a year ....

[/ QUOTE ]
Can you say New Party Poker and Classic Party Poker?

Kneel B4 Zod

10-12-2006, 08:06 AM

you meant that "It really staggers me that Party, Pacific, Will Hill and all the Cryptologic sites, Titan Poker and all the Ipoker sites, all the Boss Media sites, and all the B2B sites are pulling out of the US market" right?

people should stop framing this is some crazy decision that Party made. Of the top 20 poker networks, 8 don't accept US players.

good2cu

10-12-2006, 08:36 AM

[ QUOTE ]
you meant that "It really staggers me that Party, Pacific, Will Hill and all the Cryptologic sites, Titan Poker and all the Ipoker sites, all the Boss Media sites, and all the B2B sites are pulling out of the US market" right?

people should stop framing this is some crazy decision that Party made. Of the top 20 poker networks, 8 don't accept US players.

[/ QUOTE ]

And of all these sites which ones have a player base that is over 80% american?

MolesKnows

10-12-2006, 08:47 AM

I think it makes perfect business sense for Party to pull out. The key is that Party is publicly traded. There would be too much volitility in their stock if they stayed in the US, anytime a Party executive got arrested while visiting the US or transferrring flights the stock would plummet. Better to play by the rules expand globally and not face any sort of sanctions if the US does ever open the market up again. Private companies do not face this same type of knee jerk reaction to the value of their company so are better able to do whatever they want.

FCBLComish

10-12-2006, 08:50 AM

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All the public companies are bailing and the private ones are staying. How hard is it to figure out?

[/ QUOTE ]

Neteller is public. I believe they will stay the course.

Kneel B4 Zod

10-12-2006, 08:51 AM

[ QUOTE ]
[ QUOTE ]
you meant that "It really staggers me that Party, Pacific, Will Hill and all the Cryptologic sites, Titan Poker and all the Ipoker sites, all the Boss Media sites, and all the B2B sites are pulling out of the US market" right?

people should stop framing this is some crazy decision that Party made. Of the top 20 poker networks, 8 don't accept US players.

[/ QUOTE ]

And of all these sites which ones have a player base that is over 80% american?

[/ QUOTE ]

it doesn't matter? these sites range between maybe 5% and 50% US. but what is the difference between 50% and 80%? you're saying that it would not be worth getting arrested to keep 50% of your business, but it would be worth it to keep 80%?

or are you saying that it is illegal either way? or legal either way?

jrz1972

10-12-2006, 09:18 AM

[ QUOTE ]
[ QUOTE ]
All the public companies are bailing and the private ones are staying. How hard is it to figure out?

[/ QUOTE ]

Neteller is public. I believe they will stay the course.

[/ QUOTE ]

Neteller isn't a gambling site. They're not breaking any laws by continuing to do business as usual. That's not true for Party, Pacific, etc.

Jerry D

10-12-2006, 09:45 AM

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
All the public companies are bailing and the private ones are staying. How hard is it to figure out?

[/ QUOTE ]

Neteller is public. I believe they will stay the course.

[/ QUOTE ]

Neteller isn't a gambling site. They're not breaking any laws by continuing to do business as usual. That's not true for Party, Pacific, etc.

[/ QUOTE ]

But Party, Pacific, etc are not US companies, and they are not subject to US laws. Just like a factory in China does not have to pay US minimum wage and follow US laws in order to export all it's goods to Americans to buy.

mhcmarty

10-12-2006, 09:50 AM

[ QUOTE ]
I think it makes perfect business sense for Party to pull out. The key is that Party is publicly traded. There would be too much volitility in their stock if they stayed in the US, anytime a Party executive got arrested while visiting the US or transferrring flights the stock would plummet. Better to play by the rules expand globally and not face any sort of sanctions if the US does ever open the market up again. Private companies do not face this same type of knee jerk reaction to the value of their company so are better able to do whatever they want.

[/ QUOTE ]

How do you then explain that Party's business has always been just as legal or illegal as it will be once Bush signs the bill.

I think it's been pretty well established that this bill doesn't address on-line gamings legality but the transfer of funds for those purposes along with the ISP's hosting links to the gaming web sites.

jrz1972

10-12-2006, 09:54 AM

[ QUOTE ]
But Party, Pacific, etc are not US companies, and they are not subject to US laws. Just like a factory in China does not have to pay US minimum wage and follow US laws in order to export all it's goods to Americans to buy.

[/ QUOTE ]

This is a very poor analogy that isn't going to persuade anybody who isn't already presuaded.

You're right that a Chinese company can pay their workers $1/day as long as they do so in China. However, a Chinese company cannot open up a factory in Missouri and pay its workers $1/day. As soon as it starts doing business on US soil, it becomes subject to US laws.

The DOJ takes the view that Party, Pacific, Stars, etc. all do business on US soil because they allow you place bets in your living room. So no, Party is not really analogous to a Chinese sweatshop.

Obviously there's room for argument over whether an internet transaction *should* be subject to the legal regime of the customer's nation (the US) or the firm's nation (Isle of Man or whatever), but that's academic.

permafrost

10-12-2006, 01:21 PM

[ QUOTE ]
[ QUOTE ]
I think it makes perfect business sense for Party to pull out. The key is that Party is publicly traded. There would be too much volitility in their stock if they stayed in the US, anytime a Party executive got arrested while visiting the US or transferrring flights the stock would plummet. Better to play by the rules expand globally and not face any sort of sanctions if the US does ever open the market up again. Private companies do not face this same type of knee jerk reaction to the value of their company so are better able to do whatever they want.

[/ QUOTE ]

How do you then explain that Party's business has always been just as legal or illegal as it will be once Bush signs the bill.

I think it's been pretty well established that this bill doesn't address on-line gamings legality but the transfer of funds for those purposes along with the ISP's hosting links to the gaming web sites.

[/ QUOTE ]

Party (and others) will break more laws and face new penalties by having US players. Party said no.

I'm not a fan of Party, but they are thinking ahead. When online poker is legalized, don't you think they will be given preference for a license over those currently breaking laws?

AAAA

10-12-2006, 01:30 PM

What do you think Party would do if they were privately owned again?

Do you think it will be easier to be privately owned if the price of the stock drops drastically and the current CEO is purchasing all sorts of stock?

This is not party poker, but I just read this article from EGamingReviewMagazine

[ QUOTE ]
As published yesterday on this website, it is believed the US-facing side of the Leisure and Gaming business will be taken back into private ownership in order to keep operating. The most likely outcome would be a management buy out of the VIP, Nine and English Harbour businesses.

[/ QUOTE ]

EGamingReviewMagazine (http://www.egrmagazine.com/cgi-bin/articles.pl?action=display&id=1505&section=3&keywo rd=)

you may need a password to read the whole article.

MolesKnows

10-12-2006, 01:41 PM

[ QUOTE ]
[ QUOTE ]
I think it makes perfect business sense for Party to pull out. The key is that Party is publicly traded. There would be too much volitility in their stock if they stayed in the US, anytime a Party executive got arrested while visiting the US or transferrring flights the stock would plummet. Better to play by the rules expand globally and not face any sort of sanctions if the US does ever open the market up again. Private companies do not face this same type of knee jerk reaction to the value of their company so are better able to do whatever they want.

[/ QUOTE ]

How do you then explain that Party's business has always been just as legal or illegal as it will be once Bush signs the bill.

I think it's been pretty well established that this bill doesn't address on-line gamings legality but the transfer of funds for those purposes along with the ISP's hosting links to the gaming web sites.

[/ QUOTE ]

The difference is the US's ability and willingness to prosecute executives in these companies. The legality of the arrests earlier in the year was debatable, but now it has more teeth. Although the law focuses on the transfer of funds, the poker/gambling sites are deemed as accesories and therefore able to be prosecuted. Bottom line Party doesn't want their stock to be unstable and getting out of the US fixes this.