Gaming Companies to Lose over Legislation

Gaming Companies to Lose over Legislation

SHARES in gaming companies look set for a turbulent week, after the US Congress backed a bill aimed at cracking down on internet gambling.

The legislation, which now needs only the approval of President George Bush to become law, will make it illegal for banks and credit card companies to process payments to online gaming companies - effectively preventing Stateside gamblers from betting online, even if the casino is based overseas.

The bill does not include gambling on horseracing or state-owned lotteries.

The move will be a major blow to gaming companies listed in the UK, such as rapidly expanding PartyGaming and 888 Holdings.

Party Poker owner PartyGaming has looked to reduce its reliance on the US, but still generated about three-quarters of its revenues from the region in the first half of this year.

The threat of legislation in the US has depressed share prices in the sector all year, even though most analysts believed there would not be enough time for Congress to pass the law.