888 and Bwin shares soar as US betting competitors closed
18 April 2011
Shares in London-listed online wagering companies surged after some big poker sites in the US were shut for supposed illegal activity.
At the close of trading, Bwin were up 30% and 888 up 15% as financiers hypothesized that the US closures would increase their operations.
On Friday, 11 people connected to three significant poker websites were charged with offenses, consisting of fraud.
The US probe involves three sites: Full Tilt, PokerStars, and Absolute Poker.
Federal US authorities accused the three online poker sites of manipulating banks to process billion of dollars in prohibited revenue.
According to Execution Noble analyst Geetanjali Sharma: "The closure of the primary rivals' operations and the US legal proceedings initiated against them need to benefit European listed operators."
Playtech, another gaming website, likewise saw its shares jump 11%.
'Criminal scams plan'
Prosecutors in New York City City on Friday said they had provided limiting orders against more than 75 bank accounts in 14 countries used by the poker business.
US Attorney Preet Bharara said the websites "created an elaborate criminal scams scheme, alternately tricking some US banks and effectively bribing others to assure the continued flow of billions in illegal betting profits".
The indictment said the 3 gambling websites did not adhere to the US Unlawful Internet Gambling Enforcement Act, established in October 2006.
The law makes it unlawful for betting businesses to accept most kinds of payment from individuals involved in illegal web gambling.
The indictment sought $3bn (₤ 1.8 bn) in money laundering penalties and loss from the sites.
The authorities said Absolute Poker had stated shortly after the law was enacted that the US Congress had no control over the business's payment transactions.
PokerStars published a declaration to its players on Saturday, saying it had to suspend genuine money play for clients based in the US.
"Please be guaranteed gamer balances are safe. There is no cause for issue," the business said.
"For all clients outside the US, it is business as normal."
A message published on the PokerStars.com site by the FBI said the firm had seized the domain in connection with the investigation.
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