Parlay - Chartwell merge stymied by UIGEA

The Canadian media report that Parlay Entertainment Inc. shares nosedived nearly 19 percent Thursday after its merger plans with Chartwell Technology Inc. were finally terminated. Conversely, Chartwell Tech shares rose slightly at the news.

"The continuing market uncertainty for the online and remote gaming industry generated by recent legislative actions in the United States has forced Chartwell to conclude that it will be unable to obtain a fairness opinion which supports the business arrangement or the share-exchange ratio," the companies said in a joint release.

"Chartwell and Parlay have agreed to terminate all merger discussions. As part of this agreement, Chartwell has agreed to reimburse Parlay for a portion of its expenses in connection with the proposed business combination."

Canadian Internet gambling companies have been hard hit in the wake of legislation passed by the U.S. Congress that effectively outlaws online wagering in the United States.

The legislation, part of a port securities bill passed by the House and Senate in late September, prohibits the use of credit cards, cheques and electronic fund transfers for online gaming.