Posted on 10/01/2006 9:50:23 PM PDT by ellery
AMERICA’s $6 billion (£3.2 billion) internet gambling industry is facing meltdown after the US Senate pushed through a Bill at the weekend outlawing the processing of bets by banks and credit companies.
The surprise move, which is expected to spark a massive share sell-off, will prompt London-listed 888 Holdings to announce this morning that it is halting its entire US-facing operation, accounting for half its business.
PartyGaming, the world’s biggest internet gambling company, said last night that it was “still evaluating the situation”, although industry sources believe it will also announce a cessation of its services to American punters.
However Sportingbet, which was celebrating on Friday after a New York court released its former chairman, who had been facing gambling charges, will tell investors that it is still digesting the implications of the Bill.
Despite the Bill’s prescriptive nature, it excludes local online betting on horseracing, fantasy leagues and lotteries. It also has no impact on the hundreds of casinos and gambling emporia that dot America, ranging from the neon palaces of Las Vegas and Atlantic City to the riverboat casinos that ply their trade on the Mississippi.
One senior internet gambling executive said last night: “This is the worst form of protectionism I have ever seen. This will drive internet gambling underground and consumer protection will go out of the window. The religious groups that lobbied for this may live to regret it.”
The Unlawful Internet Gambling Enforcement Bill needs only to be signed by President Bush to become law. Legal sources predict that he will do so in the next two weeks, possibly as early as Wednesday.
The passing of the Bill in the early hours of Saturday surprised the industry. Although it had successfully negotiated Congress, its passage through the Senate looked likely to be blocked through lack of parliamentary time.
However, Bill Frist, the Republican leader in the Senate, got the measure through by attaching it to an unrelated Bill that enhances port security.
“Gambling is a serious addiction that undermines the family, dashes dreams and frays the fabric of society,” Dr Frist said. “The bottom line is simple: internet gambling is illegal. Although we can’t monitor every online gambler or regulate offshore gambling, we can police the financial institutions that disregard our laws.”
The ban may drive some small companies out of business, although big operators such as 888 and PartyGaming will highlight the strong prospects of their non-US business.
However, 888 is expected to warn its shareholders in a Stock Exchange statement this morning that its withdrawal from America will force it to pare back its cost base, resulting in a significant hit against this year’s profits.
Glad to see we are worried bout the right things...I know ill sleep better at night...idiots
They saved me from myself. Thank you overlords! I feel safer already!
The didn't bribe the right Senators.
The protection rackets, Washington style.
If Frist runs for Pres I will switch to a differn't party.
Maybe the gambling spam will slow down.
I'll bet the "religious" groups gunning for this are really just Indian Casino agents pushing for the exclusive gambling edge.......
I hate these people......(Congress)....
More hypocrisy from congress, its none of their damn business if someone wants to gamble on line.
Legislating morality never, ever works.
Thank Heavens our moral leaders in Washington have vanquished the devils dice from our homes! Now I am off to buy my mega millions ticket and then on to bingo at ST. Phillips.
Republicans are the party for smaller government
Bump
5-1 Bush signs it.
Why wouldn't he? No stem cells, no veto.
Wow, I know my boss hasn't heard this news yet, but I will be hearing the screams soon, no doubt. I really wish the Government would stick to issues deemed important by those they are supposed to represent.
I thing reverse mortgages are a worse scam than online casinos.
OOps, that's think, not thing..past my bedtime.
Contrary to the article's assertion, gambling is not an "industry."
You've summarized the issue well.
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