PartyGaming declared earnings, before interest, tax, depreciation and amortization (EBITDA) from continuing operations, at $135 million from $144.2 million the year before. However, the company had forecast a loss in the region of $133.3 million, according to a poll of analysts supplied by the company.

PartyGaming’s loss is attributed to a couple of key factors. To start: the online gaming sector was hit by the passing of the Unlawful Internet Gambling Enforcement Act in October 2006 which effectively shut down the U.S. market. PartyGaming reached a non-prosecution agreement with U.S. authorities with associated costs of $105 million, of which $15 million was paid last year.

In addition: PartyGaming's poker revenues have been hit by competition from online gaming businesses which continue to offer services to U.S.-based players despite the industry being made illegal in that country in 2006.

Chief executive Jim Ryan said: "2009 has been a tough year, but I believe it has been a year when we have made significant progress. PartyGaming's business model continues to generate strong cash flow,” he said.

The business is optimistic on several fronts. Analysts are anticipating a busy year for mergers and acquisitions due to the fragmented nature of the gaming industry today. "There are a list of suspects who one would expect us to be talking to given that our focus is consolidating the online gaming sector," Ryan said.

Also positive for Party is its strong legal position with the US authorities. The company’s decision to withdraw from the US gives it a head start, should negotiations to licence and regulate online gaming in the US get traction.

Ryan said he thinks the U.S. is drawing ever closer to re-opening to online gaming companies. "We're hearing rumours that we're going to get support from the land-based operators for online gaming so it seems like momentum is building," he said, adding it was "not impossible" new legislation could be introduced this year.

"We are talking to a number of U.S. entities about doing business with them when the U.S. market regulates. It's positioned us for growth from an M&A perspective and, from an operational perspective, I think it's our ticket back into the United States," Ryan said.

PartyGaming’s stock has been on the increase for several months now and analyst is optimistic about the future, as one commented: "PartyGaming is remarkably well prepared for a whole variety of changes. Although there is no new information on a possible game-changing acquisition, we believe it is more likely than not,"