Gambling firms hopeful of escaping ban

Online casinos soared in value today amid signs of growing opposition to legislation which would outlaw internet gambling in the United States.

Shares in Party Poker firm PartyGaming surged 11% to give the company a market capitalisation of £5.76bn (€8.25bn) – £580m (€831m) higher than last night – while shares in mid-cap rival 888 Holdings were 9% higher, boosting its value by £67m (€96m) to £812m (€1.1bn).

The improvement came after a debate in the US House of Representatives yesterday threw up opposition to a bill proposing a ban on web-based gambling and the use of credit cards and electronic payments to place bets online.

Online gaming shares have been hit in recent weeks by uncertainty caused by the threat of a ban under the Internet Gambling Prohibition Act.

Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers, said the opposition to the bill was good news for the industry, which expects to double its 2004 revenues of £5bn (€7.12bn) by 2008.

“This news will further underline the phenomenal onward march of the industry,” he said, adding that PartyGaming shares in particular remained “extremely positively viewed by the market”.

Mr Hunter said: “PartyGaming has a large exposure to the US where the majority of its revenues come from.

“Indeed, this ongoing debate and ambiguity, not to mention hostility, was one of the reasons why PartyGaming chose to float in the UK rather than the US last year. This has very positive ramifications for the company.”