By Steve Ranger, 2 October 2006 14:45
NEWS
Internet gambling companies are preparing to cash in their dollar chips as the impact of a new US law sinks in, with many preparing to suspend access to real money gambling by US customers.
Last week Congress passed the Safe Port Act, which also included the Unlawful Internet Gambling Enforcement Act of 2006, aimed at cracking down on online gambling companies by making it illegal for banks and credit card companies to make payments to online gambling sites.
After the act was passed, senate majority leader Bill Frist said: "Although we can't monitor every online gambler or regulate offshore gambling, we can police the financial institutions that disregard our laws."
Shares in many online gambling companies plunged by 50 per cent this morning in response.
Should the act be signed into law by President Bush - expected in the next two weeks - many gambling companies are likely to suspend real money gambling with US customers, pulling out of the US market, where many have the bulk of their customers.
PartyGaming said the law, which it described as the first piece of federal legislation dealing explicitly with internet gaming, "does make clear that the US government intends to stop the flow of funds from Americans to online gaming operators through criminal sanction".
And it added that if the act is signed into law it will make it "practically impossible" for the company to provide US residents with access to its real money gambling sites.
If the President signs the act into law, PartyGaming said it "will suspend all real money gaming business with US residents, and such suspension will continue indefinitely, subject to clarification of the interpretation and enforcement of US law and the impact on financial institutions of this and other related legislation".
It said should US activities be suspended, the company will look to "realign" its cost base and warned "any such suspension would also result in the Group's financial performance falling significantly short of consensus forecasts for 2006 and 2007".
888 also said it will "suspend participation by US-based customers in activities covered by the legislation. The company will implement this suspension immediately upon the legislation taking effect and the suspension will continue for so long as the legal situation remains the same".
Sportingbet said that as a result of the passing of the act, it has discontinued talks with World Gaming with regards to a potential offer by Sportingbet for World Gaming.
Sportingbet also added: "Should Sportingbet's non-US international banking partners determine that the act applied to them, then Sportingbet would no longer be able to take deposits from US residents and this would have a material impact on the company's trading performance."
Comments
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1. anonymous
They should try this legislation on the funds that lobbyists channel to those in government.........
2. anonymous
And yet Americans can continue to buy military firearms online and over-the-counter with impunity.
Ask the rural schools affected by shootings this week where the legislative priorities should lie ... the more people who have guns, the higher the probability that some nutter will use them on people.