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Faith Wavering in Party Gaming

PartyGaming has experienced a startling drop in stock value this week as the founder of the company began to sell off a huge percentage of his majority share in the online casino gambling group. Anurag Dikshit is a former founding member of PartyGaming and he has brought on the anger and speculation from a lot of the global gambling industry with his decision to accept an agreement with the US Department of Justice. Dikshit settled with the US government and paid millions of dollars to avoid prosecution and end negotiations with the DoJ for PartyGaming’s decision to operate online casinos in the US market. Dikshit’s decision to settle put a damper on hopes that PartyGaming itself could avoid a huge payment to the US government.

Dikshit’s decision to begin dumping PartyGaming stock this week has investors and stock holders on edge and the share value of the online casino gambling group has suffered greatly because Dikshit decided to sell 75 million shares. As one of the company’s co-founders, Dikshit held a majority share in PartyGaming since the gambling group began operations. PartyGaming was primarily situated in the US market prior to the UIGEA and has since struggled and pushed to establish a strong base in the European market for the company’s poker, casino, and sports betting sites.

Dikshit’s actions regarding the sale of the 75 million shares has caused PartyGaming stock to plummet 13 percent in just the days surrounding the sale. At this point there is no telling if Dikshit was able to catch the full sale of his 75 million before the price plummeted. If he did, he netted a cool $350 million, if he didn’t, he could have lost as much as $50 million in the sale…all told though, his move just cost PartyGaming a lot more than just money. At a time when companies are just starting to recover from the recession and UIGEA, this is not a time to lose consumer confidence.