Online gambling companies in the U.K. took a huge hit Monday as investors
reacted to news that the U.S. Congress had passed legislation prohibiting
the use of credit cards, checks and electronic fund transfers for online
gaming. Shares of British gambling companies, including Sportingbet and
PartyGaming, were sharply lower Monday. CBS News reporter Vicki Barker in
London reported that shares of PartyGaming, the world’s largest online
gambling site, were down about 60 percent in early Monday trading.
PartyGaming says it will pull out of the U.S. market if President Bush signs
the legislation into law. 888 Holdings says it is suspending online betting
operations in the U.S. as a result, and Sportingbet says it has called off
takeover talks with World Gaming. Gambling in any form is illegal in most of
the United States, but is an accepted feature of British society. Betting
houses, offering wagers on everything from horse racing to whether it will
snow on Christmas morning, are as common on the streets of London as pubs.
But just because it’s big business in Britain, doesn’t earn it an honored
place in the American market. As soon as the Internet began blurring the
lines between U.S. and U.K. commerce, members of the U.S. Congress reacted.
Republican Senator Bill Frist is one of the lawmakers who has fought for
years to see online gambling banned, maintaining simply that it’s illegal.
The online betting legislation got through Congress as a tagalong on a port
securities bill passed on Saturday, which was largely popular and easily won
the necessary votes. President Bush has used his power of veto very
sparingly during his leadership, and isn’t likely to scrap the port security
bill over the gambling legislation, which is also very popular among the
conservative base of the Republican party.