Shares in online casino World Gaming were suspended today as the fall-out from new anti-gambling legislation in the United States continued.
World Gaming said it asked for its shares to be suspended “with immediate effect due to a fundamental uncertainty over its ability to continue trading”.
It followed the shock approval of new laws effectively banning online gambling in the US which sent World Gaming shares tumbling 92% last week.
The decision by Congress to back the Unlawful Internet Gambling Enforcement Act deprived World Gaming of nearly all its revenues as more than 95% of its customers are based in the US.
Shares recovered slightly today but were suspended at 8.5p – valuing the firm at just £7.7m (€11.4m) million compared with the £56.6m (€83m) Sportingbet was planning to bid a week ago. Sportingbet pulled out of takeover talks following approval of the Bill.
There was a small rally in the online gaming sector today, despite confirmation that Party Poker owner PartyGaming will fall out of the FTSE 100 Index and 888 Holdings will be relegated from the FTSE 250 Index on Wednesday following last week’s dramatic fall in value.
Sportingbet was up 6% amid reports that it was looking for loopholes in the legislation. The Daily Telegraph said the company was focusing its efforts on horseracing and fantasy sports games which are exempt from the Bill.
Larger rivals 888 Holdings and PartyGaming were up 2% as investors took a punt on the sector. Both companies have already said they planned to stop trading in the United States.
Panmure Gordon analyst Ivor Jones said doubts remained over what was illegal under the new law, which outlaws online money transfers between banks and internet casinos.
“The new Act does not change what kind of gambling is legal or illegal on the internet so the uncertainties which existed before remain,” said Mr Jones.
He added: “There is an unusual divergence of interests between directors and online gaming companies and institutional shareholders.
“Shareholders might prefer that businesses continued to trade in the US and test the law. However, for directors, the risk of up to five years imprisonment makes this an unacceptable course of action.”