UK Online Gambling Shares Take A Beating After US Probe Announced
22 January 2007
By Pete Harrison
LONDON (Reuters) – Shares in European online gaming firms tumbled by as much as 9 percent on Monday following news U.S. prosecutors had launched a probe into Internet gambling.
Analysts said U.S. prosecutors were now probably trying to target founders and senior executives of Internet gambling companies, just as they did with the arrests of two NETeller founders last week.
“They’re trying to make the founders sweat, as well as current management,” said analyst Tejinder Randhawa at Evolution Securities.
Lawyer Clive Gringras, head of Olswang’s e-commerce unit, said the move would probably have a “chilling effect” on the industry amid fears other countries would follow the U.S. lead.
“The only way an Internet company could really avoid risk and uncertainty would be to stop doing international business,” he said.
“They seem to be on a mission,” said Evolution’s Randhawa.
“Extradition requests are unlikely, but they’re not impossible, given what happened to the NatWest Three,” he added, referring to three UK bankers extradited to the U.S. on charges linked to collapsed energy giant Enron.
“I would have thought the DoJ would have been more reticent, given that the legislation was ambiguous at best,” said Olswang’s Gringras.
MORE – READ THE COMPLETE ARTICLE IN CONTEXT AT SCOTSMAN.COM
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