|Like many of its counterparts, Citatel has joined companies seeking asylum outside the USA where the Unlawful Internet Gambling Enforcement Act (UIGEA) has made business almost impossible.|
Despite being based in Canada, ESI Entertainment Systems Inc (ESI), parent of online gambling payment processor Citadel Commerce, and subsidiary PayLine, will expand its UK operations moving related intellectual property and operations to Malta.
Citadel stopped processing US customers’ money in January following ‘US Department of Justice enforcement actions against financial processors executives.’ Since the UIGEA, shares lost almost 90% of their value, and have barely recovered. However, iGaming businesses have the advantage of mobility: their market remains online - whether from the US or Europe, where Citadel predicts a huge growth. Cultural rebranding necessary for customer-facing sites barely affects ‘back office’ companies like Citadel.
Personel issues are another matter. Its primary data centre will also relocate, though CFO Mark Bains will not, leaving Tony Greening to take on his role. The call-centre, in Costa Rica has already been enhanced for increased operational duties and local accounting capability - a strong indication of good forecasts. Parent company ESI is not known for huge investment in dead runners, and shares (Toronto Stock Exchange, symbol ESY) look cheap.
Also on the run is SportingBet. In response to the UK tax increase on gambling revenue it has announced a move to the Channel Islands.