Poker Stocks downgraded in London

FTSE, a company that specializes in index calculation on the London Stock Exchange, said they will downgrade PartyGaming and 888 Holdings from their current index levels.

PartyGaming will be removed from the FTSE 100, an index of 100 top blue-chip stocks (similar to the S&P 500 in the United States). PartyGaming will begin trading on the FTSE 250 index Wednesday.

888 Holdings will be removed from the FTSE 250 index, to make room for incoming PartyGaming. 888 Holdings will be placed in the FTSE Small Cap index and the FTSE All Small index. 888 Holdings will also lose its place in the FTSE 350 index.

PartyGaming owns PartyPoker, PartyCasino, Starluck Casino, PartyBingo, and PartyGammon, and is based in Gibraltar. They also offer non-US members access to sports betting via Gamebookers.com.

Their downgrade comes after PartyGaming stock took a major hit last week after Congress passed a port security bill that included the Unlawful Internet Enforcement Act of 2006 which, when signed by the President, will make it illegal for financial institutions to handle transactions from US customers to online gambling companies.

PartyGaming stock lost 63 percent of its value last week to reach roughly 1.7 billion pounds (US$3.2 billion). Its stock price dropped from 107 pence at the beginning of Monday to 45 pence by the end of the day. It’s currently trading at 39 pence.

888 Holdings owns Pacific Poker, Casino-on-Net, and Reef Club Casino. They too are based in Gibraltar. They also own Betmate.com, a sports betting company operated by Global Betting Exchange, a registered Irish company, trading under the name BETDAQ, to which non-US members have access.

Oddly, shares of 888 Holdings rose 1.4 percent to 106-1/2p after Evolution analyst Tejinder Randhawa flagged it as a possible acquisition target as gaming companies rush to consolidate to achieve cost savings in the wake of the Internet Gaming Act.

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