Gibraltar News

PartyGaming CEO to Go

Gibraltar based online gaming firm PartyGaming announced recently to investors that revenue growth during the latter part of 2007 and early 2008 had been "disappointing." The firm also announced that it would shortly be parting company with its existing CEO Mitch Garber.

PartyGaming's short but illustrious life began in the Caribbean in 1997 as a network of gambling sites operated under umbrella company iGlobalMedia. In June 2005, having already changed its name to PartyGaming, the firm participated in a much-publicised float on the London Stock Exchange with an initial public offering that valued the firm at £4.64 billion.

After peaking at almost 180 pence per share, PartyGaming's share price fell dramatically in the wake of rapid changing in the online gaming market. This was in the large part due to PartyGaming's exposure to the US market and the legislation changes that made it illegal for Americans to gamble online; at the time it earned more than three quarters of its income from US customers. Its share price dropped 58 percent overnight and today shares in PartyGaming are worth approximately 25 pence each.

At the time of the Act's passing into law, and with the whole industry in crisis, Garber gave an upbeat statement to the Gibraltar press arguing that the changes would have a "positive impact", heralding a "new and distinct era" for the firm. However despite his optimistic outlook at the time, he refused to rule out job losses and in November that year, the company announced that it would axe up to 20 percent of its Gibraltar-based employees. It is said that those who live by the sword, die by the sword, and now it is Garber's turn to take his place in the unemployment line.

The firm has already confirmed that they are seeking to replace Garber, despite his contract running until May 2009. If this is true, and rumours regarding his potential redundancy package are anything to go by, he may not do too badly out of the deal.

EUR having a laugh

The declining value of Great British pounds (sterling) against the euro over the last year has forced many Gibraltar-based employers to re-think their policies regarding the payment of wages. Naturally the payment of wages in Sterling has always been the standard practice in British Gibraltar. However, in recent months some locally based gaming firms have answered the requests of many of their employees who wished to be given the option of having their salaries paid in euros.

It seems like just the other day that Gibraltar's many Bureau de Changes were offering 1.50 euros for every pound they exchanged. However over the last year, euro strength coupled with weakness in the Sterling currency has meant that the figure is now closer to 1.20. Furthermore, the indication is that this figure may continue to fall, with "1 euro = 1 pound" not a far-reaching impossibility.

The pound's fall from grace will surely affect Gibraltarians who cross the border to do their weekly shopping. However it is those who work on the Rock but live in Spain who will be worst affected, like a majority of gaming-firm employees.

Whilst some gaming firms had for some time been offering the euro payment of employee wages, most of the companies in the industry have now followed their example. By absorbing originating bank charges and offering employees an exchange rate that is far better than they can hope to realise on the high street, these firms are doing their best to ensure that their employee's are not too negatively affected by the changes. As high property prices continue to push more and more people to rent and buy in Spain, other Gibraltar-based institutions could take a lead from the gaming industry's forward-looking practices.

Tristan Cano lives and writes about the gaming industry in Gibraltar.