Market Briefs

U.S. Brokerage Firms under Class-Action Fire

Two brokerage firms in the United States have been sued by shareholders who claim that investor funds were illegally appropriated and invested in illegal online gambling.

Deanna McBrearty of New York, N.Y., and Marylynn Hartsel of Boca Raton, Fla., on Friday filed a class-action lawsuit in Federal District Court against Vanguard Group Inc., the Pennsylvania-based investment management firm.

The suit accuses several of Vanguard's advisors, under the federal Racketeer Influenced and Corrupt Organizations Act -- or RICO -- of illegally investing funds in offshore Internet gambling considered illegal in the United States.

Ms. McBrearty has been an investor in Vanguard European, a division of the Vanguard Group, since May 2005 and Ms. Hartsel since before July 1, 2006, according to court documents.

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Fervent M&A Talk Accompanies Upbeat First Half from Playtech

Playtech Ltd. this morning revealed adjusted net profits of $57.8 million for the first half of the 2008 fiscal year, up 90 percent against the comparable period last year.

Total revenue rose 85 percent to $81.4 million, with casino and poker coming in at $58 million and $22 million -- up 78 percent and 109 percent respectively versus the previous-year period.

Much discussed during today's conference with analysts and investors was the company's planned acquisition of one of its affiliates, due diligence on which commenced this year.

Mor Weizer, the company's chief executive, said that while Playtech has designs on acquiring the affiliate, looking ahead, it is open to snatching up other of its affiliates -- all but one of which are ultimately controlled by Teddy Sagi, Playtech's founder and largest beneficial shareholder.

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Weekly Statistics from Bloomberg.com: Playtech

Listing

Low Close: 520 pence

High Close: 544.5 pence

Weekly Change: - 4.4 percent

Market Capitalization: £1.25 billion

Analysts Cautious on Crypto Subsidiary's Chinese Deal

Mahjong Time, a minority-owned subsidiary of CryptoLogic Ltd., has done a deal in China to offer online, tournament-style mah-jongg across mainland Internet cafes.

"Mahjong Time has signed a new licensee that gives us unprecedented access to China," William Sutjiadi, the chief executive of Mahjong Time in San Diego, told IGamingNews by e-mail Tuesday.

Under the agreement -- financial details of which were not disclosed -- Mahjong Time will offer online mah-jongg tournaments, supported by a proprietary payment solution, across 50 percent of China's Internet cafes.

"Mahjong Time will be able to tap into the licensee’s broad marketing presence and internet cafes nationwide," Mr. Sutjiadi said. "Customer support and hosting will be supported by the licensee. We will release more details via our press release in the next few days."

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Weekly Statistics from Bloomberg.com: CryptoLogic

Listing

Low Close: 453 pence

High Close: 454.5 pence

Weekly Change: + .03 percent

Market Capitalization: N/A

Neteller Slow but Sure in Diversification

While Neteller intends to reduce gradually its reliance on Internet-gambling-related transactions, 83 percent of first-half total revenue still came by way of the company's long-standing online bedfellow.

The money-transfer company revealed revenue of $35.9 million -- unchanged against the comparable period last year -- while pre-tax profits came in at $1.2 million against a $24.7 million loss in 2007.

Fee revenue grew 18 percent to $32.8 million compared to $27.7 million in 2007, though the 2007 figure was adjusted to exclude North American revenue of $14.9 million.

By geographic segment, European fee revenue grew 10 percent to $19.9 million driven by a small increase in active customers and strong growth in yield per customer; fee revenue from the Asia-Pacific region, meanwhile, grew 18 percent to $3.7 million.

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Weekly Statistics from Bloomberg.com: Neteller

Listing

Low Close: 65.25 pence

High Close: 68.75 pence

Weekly Change: + 4.2 percent

Market Capitalization: £81.54 million