US bill doubts lift gaming stocks

The US is an important source of players for many gaming sites

Shares in online gambling groups have soared at the prospect that a planned US crackdown on internet gaming could fall apart.

Fears that the US Congress was to strengthen laws banning Americans from using overseas-based gambling sites have hurt UK firms such as Partygaming.

But amid strong lobbying from US gaming groups, planned bills have run into opposition.

At the close shares in Partygaming were up 10%, with 888.com shares up 8.6%.

Partygaming, like many of its peers, relies on the US for much of its customer base.

Opposition

Online gaming shares have had a rough ride in recent months thanks to two bills currently before the US House of Representatives.

PARTYGAMING FACTS & FIGURES Founded in 1997 Based in Gibraltar Listed on the London Stock Exchange on 30 June 2005 Joined the FTSE 100 in September 2005 2005 revenues: $980m 2005 pre-tax profit: $324.9m. See Partygaming's shares

One is intended to ban credit card and other electronic payments to overseas gambling sites - their main source of revenue.

A second aims to make explicit the legal underpinning for US claims that it is illegal for Americans to use overseas gaming sites.

It is this bill which came under fire in the House Judiciary Committee - unusually from a witness representing the Justice Department, which usually abhors cross-border gambling.

Currently, the situation remains unclear.

The US government argues that 1960s legislation originally designed to stamp out inter-state gambling over the telegraph system covers the internet as well.

But the World Trade Organization has said the ban has to be scrapped, after the Caribbean island of Antigua - where many offshore gambling sites base themselves - complained that the US was restricting its trade.