In a time when it is most lucrative to invest in online gaming, casino owner Shuffle Master has opted out of buying online poker company Ongame Network. The casino games maker initially offered to buy Ongame Network, as it was looking to grab a piece of the ever-growing internet gambling market. However, their sudden move to step back has caused them more losses. The company shares dropped 6% and closed at $12.58 on the NASDAQ.
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It has been predicted that online gambling portals will grow in number by the end of 2012, primarily because the United States Justice Department has agreed to legalize a part of online gambling. To adhere with the latest scheme, International Game Technology and Bally Technologies Inc. were granted online gaming licenses in the state of Nevada. Nevada is the first among many states in the US, to initiate the move to legalize online casino games, like poker.
Shuffle Master recently spoke of its reasons to withdraw its deal to buy Ongame Network. Shuffle Master’s spokesperson attributed the move to the poor economic conditions within Europe, which could have hurt profitability. Shuffle Master’s CEO Gavin Isaacs further added by saying, “It has become evident to us that Ongame’s operations post-acquisition will not achieve the near-term results we initially expected and will require a larger on-going investment than anticipated.”
The company had earlier announced a €19.5 million buy from in March. Currently, Ongame Network operates in regulated European markets, like those in France, Denmark, Spain and Italy.
Todd Eilers from Roth Capital Planners accredited the decision to the management, and believes that although the decision did not make much sense from a financial standpoint, it will however; dampen the company’s plans to expand in the virtual world. Since the move to legalize poker online seems to be going on in snail pace, states like Delaware and New Jersey have not seen any development in the legal scene since the talks started. Eilers also added that, “The deal was an important piece of their interactive growth strategy so now they are not as well-positioned should the U.S. markets move forward with allowing internet gaming.”
In view of the latest scenario regarding Shuffle Master’s decision to step down as a buyer for Ongame Network, the company assures its investors that it possesses a very valuable portfolio for future plans to move into online gaming. The Las Vegas based company will furthermore pursue opportunities to grow online.

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