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Last Updated: Monday, 2 October 2006, 17:54 GMT 18:54 UK
US gaming ban hits UK firms most
Comment
By Robert Peston
Business Editor, BBC News

Poker player Cyndy Violette
Investing in poker firms can be riskier than playing the game

When Partygaming was floated on the stock market last year, its prospectus admitted that its online gambling activities were deemed "illegal" by relevant US authorities.

Which was a pretty extraordinary thing for it to say.

Why?

Because most of its revenues come from US gamblers and it was seeking to persuade the stock market to value its business at a cool 5bn.

If most of its operations were illegal, why wasn't PartyGaming worth zilch?

Well, its prospectus also said that it directors took comfort from the "apparent unwillingness or inability of regulators generally to bring actions" against it.

All change

Not any longer.

Congress has now passed legislation, which - if approved by President George W Bush - will make it impossible for Partygaming and a clutch of other British online betting businesses to collect revenues in the US.

Their share prices have collapsed - in Partygaming's case, by more than 2bn today.

But here's the bitter twist for gamblers who have lost money on shares of Partygaming and its rivals.

Congress has permitted online gaming by companies providing horserace betting, so-called fantasy games and lotteries.

And guess what? Most of them are US-owned.

It is British businesses that are being crushed by Congress.

Which suggests that in the casino of globalisation, Congress may be engaged in old-fashioned protectionism - or rigging the game in favour of US companies.


SEE ALSO
Gambling firms see shares plunge
02 Oct 06 |  Business
New York judge frees gaming boss
29 Sep 06 |  Business
William Hill halts US gaming bets
27 Sep 06 |  Business
Sportingbet chairman held in US
07 Sep 06 |  Business
Betonsports to close US business
11 Aug 06 |  Business
Jailed Betonsports boss is sacked
25 Jul 06 |  Business
Q&A: Gambling in the spotlight
18 Jul 06 |  Business

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