888 and Bwin shares soar as US betting rivals closed
- 18 April 2011
- From the section Business
Shares in London-listed online betting firms surged after some big poker websites in the US were shut for alleged illegal activity.
At the close of trading, Bwin were up 30% and 888 up 15% as investors speculated that the US closures would boost their operations.
On Friday, 11 people linked to three major poker sites were charged with offences, including fraud.
The US probe involves three sites: Full Tilt, PokerStars, and Absolute Poker.
Federal US authorities accused the three online poker websites of manipulating banks to process billion of dollars in illegal revenue.
According to Execution Noble analyst Geetanjali Sharma: "The closure of the main competitors' operations and the US legal proceedings initiated against them should benefit European listed operators."
Playtech, another gaming site, also saw its shares jump 11%.
'Criminal fraud scheme'
Prosecutors in New York City on Friday said they had issued restraining orders against more than 75 bank accounts in 14 countries used by the poker companies.
US Attorney Preet Bharara said the sites "concocted an elaborate criminal fraud scheme, alternately tricking some US banks and effectively bribing others to assure the continued flow of billions in illegal gambling profits".
The indictment said the three gambling sites did not adhere to the US Unlawful Internet Gambling Enforcement Act, established in October 2006.
The law makes it illegal for gambling businesses to accept most forms of payment from individuals involved in unlawful internet gambling.
The indictment sought $3bn (£1.8bn) in money laundering penalties and forfeiture from the websites.
The authorities said Absolute Poker had said shortly after the law was enacted that the US Congress had no control over the company's payment transactions.
PokerStars posted a statement to its players on Saturday, saying it had to suspend real money play for customers based in the US.
"Please be assured player balances are safe. There is no cause for concern," the company said.
"For all customers outside the US, it is business as usual."
A message posted on the PokerStars.com website by the FBI said the agency had seized the domain name in connection with the investigation.