Reaction To Repeal Of UIGEA News
Published: Thursday, March 15, 2007 Online-Casinos.com
REACTION TO REPEAL OF UIGEA NEWS
Shares up, but Congressman Frank has a long row to hoe
Online gambling stocks on the London market continued to benefit from the news this week (see previous Online-Casinos.com/InfoPowa report) that the chairman of the US House Financial Services Committee is considering legislation that would overturn the ban on online gambling passed last October.
Associated Press followed up the original Financial Times report with a piece which quoted a spokesman for Rep. Barney Frank, D-Mass. confirming that the congressman may introduce a bill to reverse the Internet gambling law, but he stressed there is nothing concrete yet.
"There's no draft, no text - this is very much still in the thinking stage," said spokesman Steve Adamske.
Attached to a larger but unrelated security bill last October, the act makes it illegal for U.S. banks and credit-card companies to process payments to online gambling businesses outside the United States. The legislation caught many British-based companies off guard, causing companies like Sportingbet PLC and Leisure & Gaming PLC to sell their U.S. operations.
However, Frank will likely need more than a strong push from industry to overturn current law, says Anthony Cabot, a lawyer who specialises in gaming issues who was interviewed by Associated Press.
"It's very difficult to get legislators to support something that could be perceived as pro-gambling, particularly at the federal level," Cabot said. "I think the congressman has a difficult battle ahead of him."
A spokesman for Party Gaming PLC, the largest online poker business in the world, declined comment on Frank's remarks. The Gibraltar-based company released 2006 earnings earlier this month of $128.4 million, down $293.2 million from the prior year.
Shares of British gambling firms jumped Wednesday on speculation that they could eventually re-enter the U.S. online gambling market, which had revenues of $5.8 billion in 2005.
Shares of Sportingbet rose 5.4 percent, to GBP 58.75 ($113.70) on the London Stock Exchange while Partygaming rose 12.5 percent, to GBP 42.75 ($82.76).
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