Leisure & Gaming Going Private

11 October 2006

REUTERS

LONDON, Oct 11 (Reuters) – The U.S.-focused gambling operations of Britain’s Leisure & Gaming (LNG.L: Quote, Profile, Research) are likely to be taken private and continue operating after online gambling is banned there, a source close to the company said on Wednesday.

Leisure & Gaming said on Tuesday it would block U.S. gamblers from its sites, and was in preliminary talks to sell its U.S. operations.

“All the American-facing business is likely to carry on under private ownership, and the impact on customers should be minimal,” said the source. “The management is expected to be unchanged.”

Gaming companies were left in shock when the U.S. Congress unexpectedly passed a bill last week making it illegal to accept bets over the Internet, or for credit card companies to process payments to online gaming firms.

The measure has been passed to President George W. Bush to sign into law, which gaming firms see as inevitable.

Leisure & Gaming’s U.S.-focused businesses are English Harbour, Nine.com, and VIP.

The source added that online gambling had become impossible for publicly listed companies like Leisure & Gaming, but denied reports the company faced problems with its bank loans.

“Leisure & Gaming will survive — if the worst came to the worst they could afford to pay the banks back in full,” the source said.

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