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Sportingbet Shares Rise on U.S. Sale as Web Gambling Ban Nears



Printer Friendly VersionPost a CommentTell a Friend about this Article13 October 2006
As reported by: Bloomberg
Shares of Sportingbet Plc, the owner of Paradise Poker, rose as much as 12 percent after the company sold its operations in the U.S., where lawmakers are preparing to ban Internet gambling.

Jazette Enterprises Ltd. bought the company's U.S. sports betting and casino operations for a nominal amount of $1, London-based Sportingbet said in an e-mailed statement today. The sale relieves the online gambling company of $27.2 million in liabilities and estimated closure costs.

Congress on Sept. 30 passed legislation to outlaw online gambling in the U.S., causing shares of Sportingbet and other Internet gambling companies to plummet. It wiped $7 billion off European stocks and has forced World Gaming Plc to suspend its shares after disclosing a possible loan default.

``Gambling isn't dead, but what has happened is the market has obviously realized the U.S. opportunity is gone,'' said Andy Lynch at Schroder Investment Management, which manages $226 billion.

The stock rose as much as 7.5 pence to 72.5 pence in London and was at 70 pence as of 8:44 a.m. local time. The shares, which reached a record 447.5 pence on May 11, fell 64 percent to 66 pence on Oct. 2, the first trading day after the legislation was passed. The company also ended talks to buy World Gaming that day.


Article By: Bloomberg

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