Optimal Warns Of Negative Impact Of UIGEA

Published: Wednesday, November 08, 2006 Online-Casinos.com

OPTIMAL WARNS OF NEGATIVE IMPACT OF UIGEA

Earnings jump, but the future presents problems

Montreal-based payments processor Optimal Group Inc. has reported a year-to-year rise in earnings, but warned that the new U.S. Unlawful Internet Gambling Enforcement Act will have "significant negative impact" on the operations of its majority controlled subsidiary FireOne Group.

Earlier this week FireOne posted a similar warning.

Optimal said net earnings in the quarter ended Sept. 30 increased to $1.9 million, or eight cents per share, from $500 000, or two cents per share, a year ago. Revenues rose to $53.3 million from $35.8 million in the comparable period.

However, the U.S. government's decision to halt Internet gambling transactions originating in the dominant online gambling market of the United States will significantly impact FireOne's business and the company overall, Optimal said in a release.

"We are now pursuing strategic banking relationships with a view to growing our merchant base more rapidly and improving operating efficiencies" related to non-U.S. gaming, the company said.

Optimal is aiming to make further strides in the optimal payments sector, where it handles credit card payments and electronic cheques for Internet businesses, mail-order and telephone operators and retail point-of-sale merchants.