Online gamblers demoted on FTSE

Bad news continues to dominate the online gambling sector as betting sites 888 and Partygaming have been demoted on prestigious FTSE stock indices.

Partygaming was unexpectedly dropped from the FTSE 100 outside the index complier's quarterly reshuffle and will now appear on the FTSE 250 Index.

As a result, rival online gambler 888 was nudged off the FTSE 250 to make way for Partygaming - and will now trade on the FTSE Small Cap Index.

The domino effect began when FTSE 100 retailer Great Universal Stores split up its stock market presence into two businesses, Experian and Home Retail, both of which have been added to the FTSE 100 Index.

This pushed Partygaming to the bottom of the FTSE 100 rankings.

Other online gambling businesses are also having a tough time on the stock market, following the announcement two weeks ago of new US legislation making it unlawful for credit card companies to collect payments for transactions with US online gambling sites.

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World Gaming suspended its shares earlier in the week.

And Empire Online's shares have been volatile since chairman Leonard Steinberg said he would step down at the end of October. He will be replaced by Richard Rosenburg, a senior non-executive director.

The FTSE rarely moves companies from the 100 Index outside of the quarterly review but a comparable situation did occur back in 2001, when British Telecommunications split up into BT Group and mmO2. Each joined the FTSE 100 and the smallest ranking stock in the FTSE 100 - United Business Media - moved into the FTSE 250.

888 and Partygaming were not available for comment.