888 and Bwin shares soar as US betting competitors closed
18 April 2011
Shares in London-listed online wagering firms surged after some huge 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 investors speculated that the US closures would enhance their operations.
On Friday, 11 people connected to 3 significant poker sites were charged with offences, consisting of fraud.
The US probe involves three sites: Full Tilt, PokerStars, and Absolute Poker.
Federal US authorities implicated 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 procedures started versus them ought to benefit European noted operators."
Playtech, another video gaming site, also saw its shares leap 11%.
'Criminal scams plan'
Prosecutors in New York City City on Friday said they had actually provided restraining orders against more than 75 bank accounts in 14 countries utilized by the poker companies.
US Attorney Preet Bharara stated the websites "concocted an elaborate criminal scams plan, at the same time tricking some US banks and effectively paying off others to ensure the ongoing flow of billions in illegal betting earnings".
The indictment stated the 3 betting websites did not abide by the US Unlawful Internet Gambling Enforcement Act, developed in October 2006.
The law makes it illegal for gambling businesses to accept most kinds of payment from individuals included in unlawful web gaming.
The indictment sought $3bn (₤ 1.8 bn) in cash laundering charges 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 company's payment transactions.
PokerStars posted a statement to its gamers on Saturday, saying it needed to suspend real money play for customers based in the US.
"Please be ensured gamer balances are safe. There is no cause for concern," the business said.
"For all clients outside the US, it is service as usual."
A message published on the PokerStars.com site by the yohaig code FBI said the company had taken the domain name in connection with the examination.
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