Gambling shares slump after U.S. act approved
PartyGaming, 888 Holdings prepare to fold U.S. operations
By Simon Kennedy, MarketWatch
Last Update: 6:58 AM ET Oct 2, 2006
LONDON (MarketWatch) — Shares in U.K.-listed online gambling companies including PartyGaming and 888 Holdings plummeted Monday after the U.S. Congress unexpectedly passed an act that could cripple the industry by cutting off its revenue flows.
PartyGaming (UK:PRTY: news, chart, profile) and 888 Holdings (UK:888: news, chart, profile) both said they will shut down their U.S.-facing operations once the act is signed into law by President Bush, which is expected to happen in the next two weeks.
Other firms, including Sportingbet (UK:SBT: news, chart, profile) , whose former chairman was recently arrested in the U.S. under anti-gambling laws, said they are examining their options, but added the act could have a significant negative impact on their performance.
Chart of UK:PRTY
Shares in PartyGaming slumped 58% to 45 pence a share, having touched an all-time low of 40.25 pence in earlier trading. Volume was heavy, with around 180 million shares changing hands in the first two hours of trading.
Shares in 888 Holdings gave up 34%.
Sportingbet shares dropped 58% and World Gaming Plc (UK:WGP: news, chart, profile) was the biggest faller, losing 81% of its value after it also announced that takeover talks with Sportingbet had been scuppered by the act. Also see London Markets.
Congress attached the anti-gambling measures to the Safe Ports Act, an unrelated security bill that was passed on Saturday.
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