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Follow Us Tumbles Most Since U.S. Ban as Germany Proposes Tax

April 6 (Bloomberg) -- digital entertainment Plc, the company formed by last month’s merger of Bwin Interactive Entertainment AG and PartyGaming Plc, fell 16 percent in London trading after German states’ prime ministers proposed a 16.67 percent tax on sports betting.

The drop was the most since the U.S. barred Internet-gambling financial transactions in 2006, sending PartyGaming tumbling. Germany plans to introduce a 16.67 percent levy on sports bets when it opens its sports-gambling market to private companies in 2012, the Saxony-Anhalt state government said on its website, citing a meeting in Berlin today.

The newly merged company gets about 23 percent of its pro-forma revenue from Germany, with half coming from sports, according to David Jennings, an analyst with Dublin-based Davy. Bwin and PartyGaming combined March 31 to enter European markets as they regulate and tax online gambling.

“Clearly the proposals look a lot more severe and restrictive than the operators and the market would have hoped for,” said Nick Batram, an analyst with Peel Hunt who has a “buy” recommendation on the stock. “It would significantly restrict the ability of to make money in the German market.” fell 31.5 pence to 166.4 pence, giving the company a market value of 1.4 billion pounds ($2.3 billion).

“There is still a long way to go, and we are confident in the end Germany will comply with European Union law and implement a commercially viable licensing regime,” said John Shepherd, a spokesman for in a telephone call.

To contact the reporter on this story: David Altaner in London at

To contact the editor responsible for this story: Colin Keatinge in London at

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