I-gaming Stocks Tumble After U.S. Senate Passes Prohibition

Shares across the I-gaming industry plummeted on the London Stock Exchange today following prohibitive Net gambling legislation that passed the United States Senate over the weekend.

As a result of the U.S. clampdown, shares of three of the industry's prominent operators-- PartyGaming, Sportingbet and 888 Holdings--dropped severely, eliminating an estimated $7 billion of the market value.

PartyGaming, which generates roughly 75 percent of its revenues from the U.S., announced today it will no longer accept wagers from its 900,000 American players if the bill is signed into law by President George W. Bush.

"This development is a significant setback for our company, our shareholders, our players and our industry,'' PartyGaming CEO Mitch Garber said in a statement.

According to European stocks and shares Web site Advanced Financial Network (ADVFN), PartyGaming shares dropped 59.75p (56 percent), closing at 47.25. The company's shares bottomed out earlier this afternoon at 40.25p, a record low.

Sportingbet shares plunged 116p (63.23 percent), closing at 67.75. The company reported that regulatory activity in the U.S. prompted the discontinuation of talks on the acquisition of industry rival World Gaming, whose shares also dropped 48p (75.59 percent), closing at 15.50.

According to a Financial Times report, 888 is expected to indefinitely suspend business from U.S. customers as early as today. 888 shares fell 39.50p (26.96 percent), closing at 107. The company said it will "continue to seek clarification of the overall U.S. legal position to determine whether and to what extent, if any, resumption of participation by US customers is feasible," but emphasized that, presently, "no assurance can be given that this will be possible."

Online gaming service providers also fared poorly.

Online payment processor Neteller took a severe hit, as its shares tumbled 216.50p (60.99 percent), closing at 138.50. In a statement released last weekend, the company was quick to calm investors, citing that U.S. enforcement officials and federal banking entities may take as long as nine months to prescribe regulations for the new, anti-Net gambling bill. Industry rival Fireone also suffered, as its shares fell 118p (66.86 percent) to close at 58.50.

Shares of software provider CryptoLogic dropped 252.50p (21 percent) to close at 950. Meanwhile, software provider Playtech saw its shares nosedive102p (40.96 percent), closing at 147.