Bwin.party and 888 shares soar after US Poker Sites Crackdown
This was published 21-04-2011UK online gaming companies will no doubt be seeing huge wins as a result of the illegal gambling charges being faced by American competitors after their websites were shut following a government crackdown on illegal gambling.
Affiliates and processors are now switching to safer sites and Playtech Holdings shares shot up 8% and 19% respectively while Bwin.party shares shot up 30%, as investors bet on high-value players. These big wins for the European companies is due to the moves by the US government on Friday, 15th April, 2011, to lay charges against the establishers of three of the world’s largest online poker companies after the biggest crackdown on electronic gambling since the industry was banned by Congress in America in 2006. The US government has accused the initiators of PokerStars, Full Tilt Poker and Absolute Poker of money laundering, illegal gambling as well as bank fraud.
Geetanjali Sharma, Execution Noble analyst said “The US-facing operators have been a drain on the profitability of the European operators as their US liquidity drew the non-US poker players. At the same time these operators diverted cash gained from the US operations to gain market share in the regulating territories in Europe. The closure of the main competitors’ operations and the US legal proceedings initiated against them should benefit European listed operators.”
Although non-US players are still able to play poker on the banned sites, the disruption could possibly drive some punters to rival operators.
The day after the crackdown on the illegal websites, Las Vegas casino group Wynn Resorts cancelled an agreement that it had struck with PokerStars three weeks ago and Fertitta Interactive, the owner of Station Casinos, pulled out of its recently announced deal with Full Tilt as well.
888 was also hit last week when bookmaking group, Ladbrokes, withdrew from protracted takeover talks.
