888 Online Casino Says US Ban Bill Will Fail
Published: Thursday, March 16, 2006 Online-Casinos.com
888 ONLINE CASINO SAYS U.S. GAMBLING BAN ATTEMPT WILL FAIL
But 888 online casino groups shares prices suffer from legislation blues
The CEO of major online casino and poker gambling group 888, John Anderson says he is confident that the current attempts by U.S. politicians to ban Internet gambling will fail.
Answering questions from the Reuters news agency, John Anderson said that the Leach Bill, which seeks to curtail the use of financial instruments in online gambling and passed through the House Financial Services Committee earlier this week, was doomed to fail.
Nevertheless, jittery investors reacted to the news which caused a decline of some 5 percent in online gaming shares on Thursday after similar falls the day before.
John Anderson told Reuters: "We feel confident the bill won't get through the next stages, and we'll be okay."
Ironically, the decline came as the online casino gambling group announced a 16 percent increase in annual profits and a slight reduction in its U.S. exposure.
Profit before tax rose to $50.2 million in 2005 from $43.1 million in 2004, and the company said current trading was in line with expectations.
Shares in sector leader PartyGaming were also affected, falling by 5.4 percent, while the second-biggest online gaming group, Sportingbet, fell 3.9 percent.
With about 8.5 million regular players in the U.S. and numerous routes for them to make payments, the bill would be difficult to enforce in the unlikely event it got through, analysts opined.
888 said it diversified away from the United States in 2005, reducing the share of revenues it gets from the U.S. to 55 percent from 58 percent in 2004.
"To rely on one country too much is not good, and without reducing volumes, I'd like to get the percentage we're taking from the U.S. down to 20 to 30 percent as soon as we can," said Anderson.
By making it illegal to accept payments from people who live where federal or state law prohibits wagering, the legislation would affect offshore gambling Web sites used by many Americans to place bets.
The bill now moves to the House floor for consideration.
888's Online Casino players increased 28 percent to 4.1 million in 2005, while poker players more than doubled to 1.5 million.
Group gaming revenues were up 52 percent in 2005 to $271 million.
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