True to its stance against online gambling, the United States is pursuing an increasingly aggressive anti-online gambling policy – a policy intended to thwart the industry’s ever expanding growth. This policy could have serious effects for the future of online gambling businesses, and, in particular, for those businesses that have announced their intention to float on the London Stock Exchange.

The more aggressive measures that the U.S. is pursuing include cracking down on advertising for online gambling sites (already Esquire magazine was recently forced to pull ads for online poker site, Bodog.com, and ESPN, Yahoo! And Google have stopped accepting online gambling ads for their American sites), and banning credit card companies from dealing with online gambling sites (PayPal, owned by eBAY, and Chase have already agreed not to allow transactions). The later move could prove to be particularly detrimental to online gambling companies since many of the players at these Internet sites reside in the United States.

PartyGaming, is one such company that would definitely feel the effect of such measures as most of its online customers are from the U.S. The company is preparing for a controversial 5.5 billion pound flotation on the London Stock Market and the prospective, to be released in advance of the flotation, will include information about the legal question of online gambling in the United States as well as information on the company’s four billionaire founders. Information on the financial advisors for the float, led by Dresdner Kleinwort Wasserstein, will also be provided. All of the information will, no doubt, be closely scrutinized. Dresdner Kleinwort and Wasserstein stand to make as much as 44 million pounds if the 5.5 billion pound float price is reached. Ruth Parasol, who made her first fortune in the Internet porn business, along with her husband Russ DeLeon and two other founders, will retain a 77 percent stake in the business. Some prospective investors think that PartyGaming’s expectations for the flotation is too high and that the company should, instead, follow an approach more similar to the approach that Empire Online is taking. Empire Online, which will be the first online poker group to float in London, has raised 123 million pounds, including 19 million pounds of new money. They will have a market value of more than 500 million pounds and will be valued at 14 times this year’s earnings, which is much lower than the 24 times that PartyGaming is hoping to achieve. One City fund manager said: “Never mind the dividend yield, this ought to be priced at a modest valuation and yet it doesn’t seem to be coming at a modest valuation”.