UK Online Gambling shares hit by US moves
David Carruthers CEO of BetOnSports (UK:BSS:), was detained by US federal authorities while switching flights en route to Costa Rica, where the company has call centers.
British online sites operate in the U.K., where such betting is legal (principally because the UK Gubment looked like losing it and the revenues offshore). However it is claimed up to 90% of their revenue comes from U.S. gamblers, where such gambling is illegal.
On the BetOnSports site, e.g 90% of bets are on the 3 major American sports American football, basketball and baseball which have a negligible following in the UK.
BetOnSports are seeking "clarification" from US authorities.They say In particular, the Antigua-licenced gaming activities serviced in Costa Rica and Kuala Lumpur are operating as usual.
BetOnSports shares fell 22% followed by others FTSE 100 PartyGaming (UK:PRTY)down 6% at one stage but recovered to -3% Sportingbet (UK:SBT) 11% and 888 Holding (UK:888) 6%.
Last week the U.S. House of Representatives passed a bill that would prohibit banks and credit card companies from processing payments for online bets. It would also prohibit gambling companies from accepting credit card or electronic transfer payments for online gambling.... except for horse racing.
Prospects in the Senate are uncertain, Banks don't welcome the role of policing card holders expenditure, and the holidays loom for lawmakers , President Bush is not said to be enthusiastic and an official statement voiced unspecified "concerns".
The shares look more of a gamble than ever.
3 comments:
Ok, but whose federal authorities (USA?) and detained WHERE??
If you followed the link supplied, to seek better and further particulars, you would be able to read the official company statement supplied to the LSE (that's the London Stock Market - to whom they are obliged to provide notification of price sensitive information etc.,) where you would see the Federal authorities are the US and it doesn't say where in the area covered by the Federal authorities territory. (Let me know of any other Federal Authorities between the UK and Cost Rica)Perhaps the company's PR people whose number is given on their statement will help,I cannot.
Quite where he is held is of any signficance is something that escapes me, and evidently also the folks who dumped the stock before they found out where Uncle Sam is talking to him.
Now, do you want to know, the winner of the 3.30 at Haydock on Friday ? Because for a samll fee ....
I suggest in future you consult Mystic Meg for information about UK quoted companies.
If the one-way extradition treaty (see Natwest three for details) had been in place a few years earlier, Victor Chandler may have been in some sweaty US slammer, and the betting tax still in place. Perhaps the treaty should be called the Rosencratz and Guildenstern treaty.
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