Financial Week in Review

Even if you didn't have your Blackberry handy, and -- gasp! -- were forced to read a newspaper, you probably caught the news on Anurag Dikshit's decision to settle with the United States Department of Justice.

For reasons I'll make clear in the New Year, Mr. Dikshit's decision to appear before a Federal District Court in New York, I think, was easily the biggest story in Internet gambling since Congress passed the Unlawful Internet Gambling Enforcement Act in September 2006.

In the afterglow, PartyGaming's share value, predictably, has risen, and so have spirits in the City -- well, maybe.

"PartyGaming doubling in one month? Always interesting!" one analyst told me in an e-mail last week.

Indeed, PartyGaming was last week's listed star, gaining 45.59 percent on the London Stock Exchange . . . just behind its peer, 888 Holdings, which gained 46.23 percent.

Entertainingly, the on-again, off-again talk of M&A between the Gibraltar operators reemerged. Surprised? We're not.

Ivor Jones, an analyst with Evolution Securities, suggested last week that the two companies could be set for a tie-up once both clear the Justice Department hurdle.

If nothing else, it's fascinating to watch how forcefully certain Internet gambling shares react to news -- positive or negative -- from the United States. In late May, for instance, PartyGaming's shares rose 10 percent on a United States settlement rumor then fell nearly 10 percent in the following day's trading after a broker called that rumor "premature."

Other winners last week were Bwin Interactive Entertainment A.G., which gained 20.4 percent in Vienna, and Parlay Entertainment Inc., which rose 33.33 percent in Toronto.

Undoubtedly muted by the PartyGaming headlines was Javaid Aziz's decision to return to CryptoLogic Ltd. as an activist investor. Mr. Aziz spent less than a year as the Dublin developer's chief executive, and was succeeded by Brian H. Hadfield in February 2008.

Mr. Aziz, concerned by the company's recent run of lackluster results, issued a pointed set of demands earlier this month, which included two seats on Crypto's board; reductions in compensation for senior management; and a discussion on whether to de-list from the London Stock Exchange and the Toronto Stock Exchange.

Having lost 86.4 percent on the Nasdaq, 83.4 percent in Toronto and 82.4 percent in Toronto, the company will host a call with investors on Jan. 15, 2009 -- one I imagine will be eagerly anticipated.

Financial Week in Review | Dec. 19