EFFECTS OF INTERNET GAMBLING BILL FUELS EXODUS
07 October 2006
Posted on Fri, Oct. 06, 2006
‘Black Friday’ effect of Internet gambling measure fuels exodus
ATLANTA – Internet poker players and other gamblers in the U.S. have withdrawn thousands of dollars from their Web-based accounts while some gaming sites have raced to block U.S. residents’ access to online poker, casinos and sports-betting just a week after Congress approved a ban on banks doing business with the sites.
“It was really the Black Friday of the poker industry,” said Nolan Dalla, spokesman for the World Series of Poker, referring to the legislation’s passage Sept. 30. “This is clearly going to hurt the game, its players and people in the industry.”
Even though President Bush has not yet signed the measure into law, it already is shaking up the estimated $12 billion worldwide online gambling industry, of which U.S. players account for around half of its profits. On Monday, the first business day after its passage in Congress, stocks for British online gambling companies plummeted and U.S. players were banned from some of the most popular gambling sites. The legislation seeks to curb Internet gambling by preventing payment processing between U.S. banks or other financial institutions and online gambling Web sites.
Prices of stocks for British online gambling companies, which derive up to 75 percent of their business from the United States alone fell by more than half Monday, the first day of trading after the U.S. legislation passed. Shares in PartyGaming LLC, owner of online poker behemoth PartyPoker, dropped 58 percent that day, ending at 45 pence (84 U.S. cents). Shares of Sportingbet LLC dropped 64.5 percent, closing at 66 pence ($1.24).