[Uglyowl]

In this weekends Barrons:

- President Bush is expected to sign that into law in early November.

-U.S. officials are also exploring whether international tax treaties might allow regulators to go after companies and executives on their home turfs for U.S. tax evasion.

Under the Internal Revenue Code, there's a 2% excise tax imposed on all wagers not authorized by state law. Such an imposition on PartyGaming last year on the U.S. portion of its $48 billion in wagering would come to about $800 million before penalties and interest. That alone would've nearly wiped out its net revenues of $977.7 million for the year.

Representative Leach, for one, thinks that the industry's prospects have been blighted by his legislation. "This may well be the death knell of offshore Internet gambling," he tells Barron's. "Only time will tell, however."

There is also a part about Ruth Parasol, Party founder: Life story, cashing out, etc.

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MORE TROUBLE COULD LIE ahead for PartyGaming. Gamblers anxious to clear out their accounts could cause a run on the bank. For according to the company's June 30, 2006, balance sheet, PartyGaming owes its clients $192.6 million in liabilities and prize pools, while having only $132.9 million in cash and cash equivalents to meet that obligation. And those cash holdings are likely to have fallen sharply, because of $130.5 million of cash spent on an acquisition in August. Meanwhile, The Financial Times reported the cancellation of a $500 million bank credit line that the company had made some use of. PartyGaming recently cancelled a $115 million special dividend to shore up its cash.

The problem all this poses for gamblers is that, unlike the brokerage industry, customer accounts aren't segregated and insured. Your money and the house's money tend to be one.

Several phone inquiries by Barron's to PartyGaming on its current cash situation went unanswered

Of course, the company could make good on its obligation with its retained earnings and shareholders equity, if there were any. But unfortunately the company has a negative tangible net worth of minus $53 million. And after what happened in Washington, one can bet that its servers and other physical assets are no longer worth the $58.3 million shown on the balance sheet. Nor are its goodwill and other intangible assets likely worth anywhere near their $144.4 million balance-sheet value. Not when the business has just gone up in smoke.

PartyGaming offers a sad tableau. Investors have already lost a ton. Its players may have their money frozen, or never get all of it back. There are no winners in this sordid tale, except Parasol and the other insiders. You don't beat the house.