Online Gambling Companies Take Direct Hit, Stock Prices Plunge
22 January 2007
MARKET WATCH – DOW JONES
By Sarah Turner, MarketWatch
Last Update: 9:34 AM ET Jan 22, 2007
LONDON (MarketWatch) – Shares in online gambling companies PartyGaming, SportingBet, 888 Holdings and Empire Online slipped once more in London on Monday after published reports that the U.S. government has requested British banks hand over transaction details of their dealings in the online gambling sector.
PartyGaming (UK:PRTY: news, chart, profile) shares lost 7.3%, SportingBet (UK:SBT: news, chart, profile) shares dropped 7.4%, 888 Holdings (UK:888: news, chart, profile) lost 2.9% and Empire Online (UK:EOL: news, chart, profile) declined 1.7% in the London stock market.
PartyGaming shares hit a high of 179.5 pence in 2005 but were trading at just 28.25 pence on Monday, while SportingBet shares traded at a high of 452 pence last year. On Monday, SportingBet’s shares were valued at 34.5 pence…..
“It’s a regulatory sentiment issue,” said Andrew Lee, a leisure sector analyst at Dresdner Kleinwort. “People are trying to put a value on the risk of the U.S. trying to claw back some money and what impact it might have in terms of sentiment and share price.” He noted that so far, actions from the U.S. have been significantly more negative than expected by the market. The sector slumped in early October when the U.S. Congress unexpectedly passed legislation that will make it a criminal offence to receive funds related to any online gambling activity that is illegal under state or federal law.
Also, several online gambling senior executives and shareholders of these companies have been arrested in the U.S.
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